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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.
Introduce about the open-economy macroeconomics shortly. The Open Economy: a. One of the major concerns introduced through open-economy macroeconomics is the exchange rat
#questionAssume that an economy''s GDP Y=5000. Also assume that the government runs a deficit where tax revenue T=1000 and government expendituresG= 1500. The consumption function
Between 2007 and 2009 the U.S. economy experienced a severe recession. In an effort to stimulate the economy, the federal government passed a stimulus package. Explain the federal
1 .Use the concepts of sampling error and z- scores to explain the concept of distribution of sample means. (this is a paragraph answer needed) 2. Describe the distribution
What are the uses of time series data?
While referring to the "EYE on YOUR LIFE" section on page 389 of the textbook, discuss the change in the U.S. unemployment rate and inflation rate over the past year based on the P
1. In December 1979 it was possible to buy a January 1980 contract in gold at the New York Commodity Exchange for $487.50 per ounce and sell an October 1981 contract for $614.80 on
Consider the multiplier model we have studied in class. Assume that the economy is initially in equilibrium and that real income is $180. The marginal propensity to expend is 0.66.
briefly explain any five uses of national income statistics
EXPLAIN THE MR AND MC APPROACH FOR EQUILIBRIUM DETERMINATION OF FIRM IN SHORT RUN.
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