Examples of externalities connected with consumption

Assignment Help Business Economics

Reference no: EM13978598

a. Give two examples of externalities connected with consumption and saving that can be used in arguing for policies aimed at increasing U.S. personal saving. Explain why they can be used that way.

b. Explain what a traditional I.R.A. is. Explain how it increases a depositor's return to saving.

c. Explain a method that economists have used to estimate the fraction of deposits into traditional I.R.A.s that represent "new" savings induced by the favorable tax treatment the deposits receive. What theoretical reasons suggest that we could reasonably expect that less than half of these I.R.A. deposits are new saving, induced by the tax treatment? Explain

Reference no: EM13978598

Questions Cloud

Integrate knowledge of molecular interactions : Integrate knowledge of molecular interactions such as bonding and reactivity to understand biogeochemical cycles Use knowledge of chemical interactions in nature to explain the consequences of human-made disruptions on biogeochemical cycles.

What level of excess reserves does the bank now have : Suppose that Third National Bank has reserves of $20,000 and checkable deposits of $200,000. The reserve ratio is 10 percent. The bank sells $15,000 in securities to the Federal Reserve Bank in its district, receiving a $15,000 increase in reserves i..

Combination of government spending increases-tax increases : Assume that a hypothetical economy with an MPC of 0.9 is experiencing severe recession. By how much would government spending have to rise to shift the aggregate demand curve rightward by $30 billion? Determine one possible combination of government ..

You are to prepare the necessary adjusting journal entries : The following information for Wilson Company is available on June 30, 2013, the end of a monthly accounting period. You are to prepare the necessary adjusting journal entries for Wilson Company for the month of June for each situation given. Appropri..

Examples of externalities connected with consumption : Give two examples of externalities connected with consumption and saving that can be used in arguing for policies aimed at increasing U.S. personal saving. Explain why they can be used that way. Explain what a traditional I.R.A. is. Explain how it in..

Incidence of payroll tax is borne by employers-employees : The incidence of a payroll tax is borne by both employers and employees. MRP represents what the marginal physical product is worth. If the MRP of labor is below the wage rate, the firm should lay off workers.

Maximum revenue if charge separate price for skis-bindings : You are the manager of a local sporting goods store and recently purchased a shipment of 60 sets of skis and ski bindings at a total cost of $25,000 (your wholesale supplier would not let you purchase the skis and bindings separately, nor would it le..

All insurance companies offer preventative services : Do you agree or disagree that preventative services are a viable solution to cutting down on rising health care costs, and why or why not? Why do you think that not all insurance companies offer preventative services?

Sell in a single package and the optimal package price : The American Baker’s Association reports that annual sales of bakery goods last year rose 15 percent, driven by a 50 percent increase in the demand for bran muffins. Most of the increase was attributed to a report that diets rich in bran help prevent..

User Account

All Pages