Suppose people can consume the income they earn or save and invest it at rate ?. If we tax wealth at a rate greater than ?, how are people likely to adjust their rate of savings?

Q: What might deter a policymaker from trying to raise the rate of saving?

A: Higher saving implies fewer resources are needed to make more consumption goods to produce capital…

Q: Suppose a closed economy has an aggregate savings equal to 150 and intended investment equal to 400.…

A: Investment= public savings+ private savings. 400 = public savings+ 150 Public savings = 400-150=250

Q: If saving dropped sharply in the economy, what would likely happen to investment? Why?

A: The savings and investment are two important factors that are determined based on the rate of…

Q: Does the amount of government spending in an economy respond directly to changes in aggregate…

A: The instruments of fiscal policy are government taxation and spending. To accomplish different…

Q: How distortions affect the market of tradable and non-tradable goods and how it affects the…

A: the Market of tradeable goods refers to the industries whose goods are traded in international…

Q: Assume Marjeri lives for only two periods and has the utility function U(C1, C2) = In C1 + 0.9 In C2…

A: Let's assume Y1 -> Income in period 1 Y2 -> Income in period 2 C1-> consumption in period 1…

Q: Show on the graph how each of the following events changes the equilibrium interest rate by shifting…

A: Market of Loanable funds:- The supply is the entire amount of loanable money available at a given…

Q: Use the information in the following table to do exercises 8-15: Y C G $100 $120 $20 $30 $10 $300…

A: MPC = Change in C / Change in Y = (300 - 120) / (300 - 100) = 180/200 = 0.90

Q: Q.2.1.1 Identify the value of savings in this economy. Q.2.1.2 What is the value of tax revenue in…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…

Q: If private investment increases by $1, real GDP increases by $4. What do we call this in economics?…

A: Real GDP is calculated as a sum of consumption, investment and  government purchases in the closed…

Q: (d) Calculate the level of disposable income such that saving is exactly zero for this person. If…

A: The total income received by the household sector is subject to tax payment accordingly to the…

Q: Is saving or spending better,and who is it better for?Explain

A: Saving is the amount that remains after deducting consumption amount from the income. Below is the…

Q: Explain the meaning of comprehensive income and show how a tax on interest income influence people…

A: What is Comprehensive Income?  Comprehensive income is the variety in an organization's net…

Q: The following equations describe an economy. Y = C + I + G. C = 120 + 0.5( Y - T ). I = 100 -…

A: The IS-LM model is used to determine the equilibrium interest rate and income level in the economy.…

Q: Arizona, and Yvette, an economist from a university in

A: The tariff is a tax imposed on imports on a particular commodity. The quota is a quantity…

Q: 1. In France and Germany, it is difficult for a household to increase its borrowing based on an…

A: Financial accelerator refers to the vicious cycle by which shocks to the financial markets get…

Q: When a goverment takes steps to decrease the interest rate, how does this affect borrowers? How…

A: Interest rate: A loan fee is the level of chief charged by the moneylender to utilise its cash. The…

Q: If the government collects more in tax revenue thanit spends, and households consume more than…

A: Private savings is the income(Y) level adjusted for taxes(T) and consumption(C). Public savings is…

Q: If I had a federal budget that was typically balanced where new taxes causes $100 billion surplus.…

A: The federal budget is an itemized plan for the United States' yearly public spending. It is used to…

Q: Which of the following two effects of a decrease in the tax rate on saving would raise savings?…

A: Answer - Need to find - Which of the following two effects of a decrease in the tax rate on saving…

Q: In this hypothetical economy, there are two consumers living over two periods of life. Ann's incomes…

A: Answer: For Ann, Consumption in period 1 = c1 = 50000 , income = y1 = 50000 Let savings in period 1…

Q: Congress passed the CARES Act to provide an economic safety net during the Covid-19 pandemic…

A: During the pandemic every government is concerned about the economic slowdown. The consumption…

Q: explain the quotation. “Do not save what is left after spending, but spend what is left after…

A: The quote “Do not save what is left after spending, but spend what is left after saving.” is one of…

Q: Suppose the government increases both taxes a government purchases by $10,000. Assuming th the…

A: the loanable funds doctrine is a theory of the market interest rate. According to this approach,…

Q: Accordingtothetextbook,whichofthefollowingstatementsis(are)correct? (x)  An advantage of a…

A: A consumption tax is a taxing system in which people are charged on how much people consume rather…

Q: ouseholds. Households with individuals making up to $75,000 received a $1,200 check and households…

A: The CARES Act is an economic stimulus bill being passed by the 116th U.S. Congress and in turn…

Q: Why do rich people have a higher marginal propensity to save than poor people?

A: In economics, the term marginal propensity to save (MPS) depicts the proportion of aggregate raise…

Q: Show that if the multiplier is one, the slope of the savings schedule is one.

A: Multiplier really intends that with expansion in speculation there is ordinarily expansion in pay.

Q: Explain, why is reducing the interest rate not necessarily enough to stimulate investment spending?

A: The money used by firms and businesses to buy capital equipments and tools to increase production…

Q: This person earns $1000 of income today and $2000 income next year. Point C represents his…

A: As per given information, we can say Y1=$1000, Y2=$2000, r=10%=0.01  The intertemporal budget…

Q: Explain why the sum of marginal propensity to consume and marginal propensity to saving it's equal…

A: Marginal propensity to consume (MPC) refers to the slope of the consumption function. MPC is the…

Q: Consider the following picture. c' A B E F C Suppose that the government changes government…

A:

Q: In saving drepped sharply in the economy, what would be likely to happen to investiment? Why

A: In equilibrium, planned saving equals planned investment.

Q: Is savings harmful or beneficial to the economy? Contrast the two views on this issue.

A: The impact of saving on economic growth has been a point of argument. One group argues that savings…

Q: Use the diagram below to answer the question. O A OF O C ΟΕ Which point corresponds to level of…

A: Income of the individual can either be saved or consumed. So, Income = Savings + Consumption. Or ,…

Q: If the MPC is 0.29 what would be the value of MPS do it fast?

A: The use of products and services by households is called consumption in economics. Consumption is…

Q: If  taxes are increased, will most people save more or less than before? Does national saving rise…

A:

Q: Explain how government borrowing affect interest rate in the market. What impact such change in…

A: The fiscal deficit occurs when government spending exceeds government receipts. The government…

Q: Explain which of the graphs below best explains how private investment changes if wealth goes up.…

A: In the loanable funds market, firms and households enter to exchange capita and money for investment…

Q: Tax cuts in the classical range of the AS will stimulate output and unemployment -false 5-…

A: Hi Student, Thanks for posting the question. As per the guideline, we are providing answer for the…

Q: making up to $150,000 received a $2,400 check. Think about how the savings rate varies with…

A: A stimulus check is a check being sent to a taxpayer by the government of US. These are being…

Q: If taxes are reduced , will most people save more or less than before ? Does national saving rise or…

A: The aggregate spending behaviors of families and public and private substances can swiftly influence…