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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.
Suppose that midterm grades determine your nal course grade putting the Midterm 1 grade on the horizontal axis and the Midterm 2 grade on the vertical axis, draw indifference curve
Maximum profits will occur at the output level where is the greatest vertical distance between Total Revenue(TR) AND Total Cost(TC. uSE THE TOTAL REVENUE-TOTAL COST CURVES TO Illus
Financing of the external payments deficit: The trend in India's widening CAD during the second half of the eighties, both in absolute terms and also as a proportion of the
A) Suppose Jean Splicer, an investor, buys $300,000 of shares of stock in a diversified bundle of Bio-tech firms and exactly one year later sells those shares for $315,000. Assume
Market questions come in two types: Type 1: you are given the exogenous variable change and you must shift the correct curve in the right direction and then determine the new pr
if the price elasticity of demand is computed for two products, and product A measures .79 , and product B measures 1.6 , then ? a. product A is more price elastic than product
Fiscal Policy An Increase in Government Spending: Figure 1 Let us examine how an increase in government spending affects the interest rate and the level of income.
real gdp measures?
Foreign Institutional Investment: Foreign investment flows in the balance of payments (BOP) comprise FDI flows and portfolio flows. The latter consists of resources mobilis
Suppose that the desired capital stock is given as: K* = 0.3Y/i r Where Y = GDP, and i r is the real interest rate. Suppose further that Y = $5 trillion and that i r
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