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Suppose the elderly as a group manage to lobby Congress successfully for a one-time wealth transfer, “paid for” by a tax on younger workers. Assume the elderly have a remaining life-expectancy of 10 years (over which the transfer will be spread), and the workers have a 30 year remaining life expectancy (over which the tax burden will be spread). Assume also that the transfer is perfectly efficient such that the Transfer (X) = the Tax (T). a. What effect does this redistribution scheme have on consumption and savings patterns over BOTH cohorts’ lifetimes? b. Then consider whether such a scheme desirable from a broad societal perspective (i.e., does it benefit society as a whole)? Why or why not? That is, if you think the scheme is desirable, give an economic reason that explains how redistribution of pie slices makes the pie bigger. If it is undesirable, give an economic reason why not but then explain why such a scheme might nevertheless gain passage anyway?
Considering expected return and risk, which projects are good candidates? The firm believes it can earn 5% on a risk-free investment in government securities
The marketplace equilibrium price is $45 every bag. The price at a is $85 every bag. The price at c is $5 every bag. The price at f is $59 every bag.
The GDP is $40 billion below its potential value. It is expected that next-period GDP will be $20 billion below potential and that two periods from now it will be back at its potential level. The multiplier for government spending is 2. What is the b..
Given the optimal output in c, Elucidate how much profit (or loss) can the manager of Ever Klein Pool Services expect to earn?
As the United States economy moves out of a recession, U.S. financial investors increase their purchases of stocks that are expected to earn a higher rate of return than they are currently earning on their savings account deposits.
Two identical countries, Country A and Country B, can each be described by a Keynesian-cross model. The MPC is 0.8 in each country. Country A decides to increase spending by $1 billion, while Country B decides to cut taxes by $1 billion. In which cou..
What is the expected profit of simultaneously pursuing both programs.
Consider a perfectly competitive market where demand is given by P=84.20-2.15Q and supply is given by P=12.78+1.20Q. Calculate the equilibrium quantity and price.
Which of the following is not considered one of the three kinds of citizen-police encounters?
Two identical countries, Nation A and Nation B, can each be described by a Keynesian-cross model. MPC is .9 in each nation. How much is government purchases multiplier for each nation.
What is the different between quantitative easing and inflation? And how can they be explained using the graph of demand V.S supply?
How does Supply and Demand play a role in economic thinking? What factors influence economics that don't directly relate to it? How does public choice economics influence the market?
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