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Suppose that Lilistan has two types of citizens: low-income citizens (income = $20,000) and high-income citizens (income = $80,000). Interest income is currently taxed and each type of citizen saves 10% of his or her income for retirement. The government is proposing to allow citizens to put money into an Individual Retirement Account where the contributions would be tax-deductible and interest would accumulate tax-free. Withdrawals would then be taxed as income. The government currently wants to set a $5,000 annual limit on the accounts. Discuss the effect of this policy on the saving choices of both the low-income and high-income citizens in terms of both income and substitution effects as well as the overall effect.
Charge is distributed with constant volume density D throughout the rectangular box with length a, width b and height c. a) what is the monopole moment of this system. b) What i
Why does a production possibilities frontier with increasing opportunity costs have a bowed-out shape? The curve is bowed-out because some resources are better suited for the
Introducing the Foreign Trade Sector Most economies in the real world are open economies. They engage in trade with other economies. Goods and services are exported and import
If rice production is land intensive and computer production is labor intensive, though both good require some land and labor, the two-good production possibilities frontier will c
A, Explain how a person can be free to choose but his or her choices are casually determined by past event 2 B , Draw the casual tree for newcomb''s problem when Eve can''t perfe
Q. Explain about Price Inflation? The major reason for allowing for non-constant wages in the model is that we then can allow for persistent deflation/inflation. With constant
ALL SELLERS MAY BE TEMPTED TO RAISE THE PRICE OF WHAT THEY SELL, BUT A NEGATIVE UNINTENDED EFFECT OF RAISING THE PRIE COULD BE______ IN UNITS SOLD LARGE ENOUGH TO _____THEIR TOTAL
Tax cuts get better the economy by giving the people more spending power and higher consumer confidence, which leads to them spending more of all of their income which lead to more
Q. Describe about consumption function? The consumption function Consumption C(r) is assumed to be negatively related to the real interest rate r
You have been invited by world leaders to be part of a team of international economists selected to make recommendations on how the international community might work together more
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