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Joe owes Willy $5,000 from an old gambling debt. Joe knows that there is no way he can repay the debt in the near future. He asks Joe if he will take a $25,000 life insurance policy that has a cash surrender value of $4,200 and release him from the debt. Willy agrees to take the insurance policy and cancels Joe’s debt. Willy makes only one premium payment on the insurance policy of $50 when Joe is killed in an auto accident. Willy collects the $25,000. Explain all the tax consequences of these events for both Joe and Willy.
Suppose that a labor union proposes to double the wage for 0
Further assume that in a good year the artist earns $50,000 and that in a bad year she earns $30,000. calculate the artist's average propensity to consume on average.
Choose a macroeconomic issue of current interest for which you can find two editorial or op-ed columns from national or international newspapers or magazines that take differing positions on the issue.
Now suppose this game is to be played an unknown number of times. Both firms know that there is a probability .1 that the current play of the game will be the last time the game will be played. So there is a probability 1.0 that the game will be p..
Illustrate what policy options are available to the government to counter the effect of a sharp fall in real estate values on the economy.
Economists are in almost globally agreement that Free Trade is good for all countries. Why are they in such universal agreement.
Consider a 2-company Cournot model. Let ci (i=1,2) denote firm i's cost per unit of output produced, and suppose that c1 > c2 .
Describe the opportunity cost of good 1 in terms of good 2. Find out the opportunity cost of good 1 at the point where x1=1.
Use the following information to answer following questions, Compute the value of the price index for GDP for 2005 using 2004 as the base year. By what percent did prices increase?
In the late 1990s a growing number of economists argued that world policymakers were focusing too much on fighting inflation. The economists also argued that the technical level of potential output had risen
Discuss the effect of each of the following on the quantity demanded or the demand for new motor homes.
Utlizing the aggregate demand and aggregate supply model, draw an economy in a boom.
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