Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
In our 2 period consumption savings model (with no leisure, u(c1, c2), suppose interest income in period 2 is taxed at the rates, where 0 < t2 < 1. The individual has zero initial wealth A0 = 0. Exogenous real income in period 1 and 2 are y1 = 1 and y2 = 0.
a) Write down period 1 and period 2 budget constraints for the consumer.
b) Using each period budget constraint, derive the consumer's Lifetime Budget Constraint (LBC).
c) Graphically show the optimality condition for the consumer's decision. This is, in the c2 vs c1 space plot the budget constraint line, the indifference curve and the optimal consumption choice.
d) What is the effect on savings if the interest income tax is increased? Show graphically.
e) Let u(c1, c2) = lnc1 + lnc2. Solve explicitly for the optimal consumption in both periods. Discuss briefly the effect of the interest income tax on each period consumption.
Given a four sector economy how do you find the budget balanced
Furthermore it can be seen that there are interesting relationships between the remaining variables. Firstly, at the 95% significance level it can be seen that interest rates Grang
Question 1: Consider a two-period, two-person pure exchange economy. Utility functions and endowments are given as follows. u1(x0; x1) = (x0x1)2 and e1 = (18; 4) u2(x0; x1) = ln x0
In the view of above complications, there is a long-standing debate on whether the fiscal policy should be active or passive in nature. Note that in the Keynesian context; even a p
One constraint in our economy is time. As a society, we make choices about the allocation of time between work and other pursuits. In the US, most workers are eligible for overtime
In what major way do the Microsoft and Standard Oil cases differ?
What is Purchasing power One problem in using exchange rate when comparing GDP per capita between countries is that is fluctuates quite a lot. A way of avoiding dependence on
The Research and Development Division of your company has just developed a new gaming system called the Zed Box. The R&D Division spent $800,000 developing this product and the Ma
An ecologist has been reading the literature on the subject of factors affecting growth and metamorphosis of tadpoles in ponds. Some frog species (e.g. Hyla gratiosa) reproduce in
Why do financial crises occur and why are they so damaging to the economy?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd