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Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is a decrease in the maximum contribution, from $5,000 to $3,000 per year. Shift the appropriate curve on the graph to reflect this change. This change in the tax treatment of interest income from saving causes the equilibrium interest rate in the market for loanable funds to (rise, fall) and the level of investment spending to (decrease, increase). An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit. Shift the appropriate curve on the graph to reflect this change. The repeal of the previously existing tax credit causes the interest rate to (rise,fall) and the level of saving to (rise, fall). Initially, the government's budget is balanced, then the government significantly increases spending on national defense without changing taxes. This change in spending causes the government to run a budget (deficit, surplus), which (increases, decreases)national saving. Shift the appropriate curve on the graph to reflect this change. This causes the interest rate to (fall, rise), (crowding out, increasing) the level of investment spending.
Assume that you are the manager of a firm. You are concerned about a potential increase in interest rates because it would reduce the demand for your products. Currently, economic growth is high, but annual inflation has increased from 3 percent to 5..
Describe the relation between marginal and average costs. Describe the relation between marginal and average fixed costs. Describe the relation between marginal and average variable costs.
A person has a choice between only the following bundles: (1,1), (2,2) (3,3) (1,2) (1,3) (3,2) (3,1) (2,1) (2,3). The person’s preferences are that they prefer the bundle that has a bigger number when the x coordinate is divided by the y coordinate. ..
Is the government as efficient as the private sector in delivering services? Why? Why not? The new health program (Obamacare) has a number of problems. Will the new health care program be affected adversely?
Explain what a slope of .5 would mean if you were measuring the relationship between consumer spending and income, where the dependent variable is consumer spending and the independent variable is income? Explain what is meant when the slope of a lin..
Agricultural price supports increase consumer surplus. Agricultural price supports decrease producer surplus. Agricultural price supports benefit taxpayers by reducing the price of food.
The Discussion is a great place to learn in an interactive environment, so be sure to participate actively in the weekly Discussion. By doing so, the entire class benefits from the Discussion and learning is significantly enhanced. You will need t..
In a Cournot oligopoly, a decrease in a firm's marginal cost leads to. When two firms compete as a Cournot duopoly, the resulting market price is ______________ the price a monopolist with the same market demand and (greater than, smaller than, the s..
What is the equilibrium price. What is the equilibrium quantity. If the price was $7, what would be the quantity demanded
Suppose that three risk-neutral bidders are interested in purchasing a Princess Beanie Baby. The bidders (numbered 1 through 3) have valuations of $12, $14, and $16, respectively. Which bidder wins an open-outcry English auction? What are the final ..
The water is identical in the two sizes and John gets no utility from the containers themselves, only from the water.
______Companies that have flat organizations tend also to have
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