ECON MACRO (with MindTap Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337408738
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 7, Problem 4P
To determine
Pros and cons of
Introduction:
Unemployment insurance is the amount of money given to the unemployed people who are unable to find the job. It is a kind of a welfare scheme so that unemployed people can fulfill the basic needs of life.
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Unemployment benefits are subject to income taxes. They are not (by default) subject to withholding, or to payroll taxes. Suppose that a particular worker is subject to a payroll tax of 7.65% of her wages; that she pays an average income tax rate of 10%; and that after losing her job, she is eligible to receive 60% of her previous weekly income. (Show Work)
(a) What fraction of her take-home paycheck will she receive from unemployment insurance?
(b) What effect does the tax treatment of unemployment insurance benefits have on the ability it provides its recipients for smoothing?
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(12.)what impact does inflation have on the value of business ?
Given the following data of monthly salary of an
employee :
(i) Calculate the real monthly income for each year.
(ii) In which year did the employee have the highest
purchasing power?
(iii) How much salary should he have earned in each of
the years to give him the same purchasing power
as in the year of his highest real income?
year
Monthly Salary ($) |Price Index
(1997 = 100)
15,000
15,500
16,000
16,500
17,000
%3D
2000
2001
115
120
2002
130
2003
138
2004
144
2005
18,000
150
Chapter 7 Solutions
ECON MACRO (with MindTap Printed Access Card) (New, Engaging Titles from 4LTR Press)
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