Homework Answers
Answer to the question is option c) a large increase in current consumption.
This is because , a permanent decrease in taxes increases the incentive to work and also increase the after tax income. It also increases the purchasing power permanently. All this provides incentives to increase the current consumption. All this has an impact only on the current level. As time passes , that is in future it is acts normally on individual spending and hence people get to used to their spending. So only current consumption increases.
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c=261, c'=263, and consumption increases over time Question 13 (1 point) A permanent decrease in taxes...
Question 40 (1 point) ✓ Saved If government spending increases and taxes decrease: implicit liabilities will...
Question 40 (1 point) ✓ Saved If government spending increases and taxes decrease: implicit liabilities will increase. O implicit liabilities will decrease. the public debt will increase. the public debt will decrease. new 1 Question 30 (1 point) The aggregate demand curve: slopes downward for the same reasons that an ordinary demand curve does. slopes downward in part because when the price level falls the real wealth of the public falls, and this induces people to change their consumption. slopes...
Question 1 (1 point) As interest rates decrease, the: O Cost of current relative to future...
Question 1 (1 point) As interest rates decrease, the: O Cost of current relative to future consumption decreases Desire of many individuals to save increases Cost of current consumption relative to future consumption remains the same Cost of current relative to future consumption increases
5 In the intertemporal model, the real interest rate increases, the following statement is wrong ()...
5 In the intertemporal model, the real interest rate increases, the following statement is wrong () A budget constraint line is steeper B Consumer endowment points change C. The present value of the consumer ’s lifetime wealth decreases D consumers will increase current consumption 6 In the intertemporal model, the effect of increasing real interest rates on lenders is () A Current consumption increases, future consumption increases B. Current consumption decreases, future consumption increases C Current consumption is uncertain, and...
Please answer question a Question 2: The consumption function with taxes that change over time To...
Please answer question a
Question 2: The consumption function with taxes that change over time To do this question you need to be familiar with the Appendix to chapter 4, which deals with the determination of the two period consumption and is on the class website (see OnQ). Households must decide how much they wish to spend on consumption today ((1+1Jel) versus consumption in the future (0+τ)G), where t is the rate of taxation on consumption (HST). Households are constrained...
1. Are increases in both government purchases and net taxes at the same time expansionary or...
1. Are increases in both government purchases and net taxes at the same time expansionary or contractionary? Would both changes together increase or decrease the federal government deficit?
Homework #8 1. Are increases in both government purchases and net taxes at the same time...
Homework #8 1. Are increases in both government purchases and net taxes at the same time expansionary or contractionary? Would both changes together increase or decrease the federal government deficit?
Question 12 (1 point) Suppose that demand for a good increases and, at the same time,...
Question 12 (1 point) Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good? Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. Equilibrium quantity would increase, but the impact on equilibrium price would...
i understand why a decrease in tax will increaseconsumotion but i dont understand why a future...
i understand why a decrease in tax will increaseconsumotion
but i dont understand why a future tax raise will also increase
consumption.
in this case, does ricardian equivalence hold? thank you
6:41 PM Wed Oct 30 TODO+ Xaxes) may be advantageous because 54% + 8 0 A) it discourages credit-constrained consumers from borrowing too much. B) it increases the welfare of credit-constrained consumers. C) it eliminates the problems that cause credit market imperfections. D) it encourages more private savings. E)...
ents is true concerning the consumption function et e n between ale Ince ction lies above...
ents is true concerning the consumption function et e n between ale Ince ction lies above the 45-degree line, then that is independent of the level of disposable income is a. It alopes upward. b. Ito alope equals the MC. It represents the direct positive relation naumption spending and the level of real If the consumption function lies above saving is positive. e. All of the above. 9. Consumption spending that is independent of the known as: a marginal consumption....
Question 1 (1 point) If we represents a two-period consumer's lifetime wealth and r denotes the...
Question 1 (1 point) If we represents a two-period consumer's lifetime wealth and r denotes the real rate of interest, the slope of the consumer's budget line is equal to Or (1+we) O-1/(1+r) Orxwe. -(1+r) O-r/(1+we) Question 2 (1 point) Intertemporal decisions are economic decisions O involving trade-offs across periods of time. O made in between two periods of time. that ignore concerns about the future. that are made only once. O made within a given period of time. Question...
Question 40 (1 point) ✓ Saved If government spending increases and taxes decrease: implicit liabilities will increase. O implicit liabilities will decrease. the public debt will increase. the public debt will decrease. new 1 Question 30 (1 point) The aggregate demand curve: slopes downward for the same reasons that an ordinary demand curve does. slopes downward in part because when the price level falls the real wealth of the public falls, and this induces people to change their consumption. slopes...
Question 1 (1 point) As interest rates decrease, the: O Cost of current relative to future consumption decreases Desire of many individuals to save increases Cost of current consumption relative to future consumption remains the same Cost of current relative to future consumption increases
Please answer question a
Question 2: The consumption function with taxes that change over time To do this question you need to be familiar with the Appendix to chapter 4, which deals with the determination of the two period consumption and is on the class website (see OnQ). Households must decide how much they wish to spend on consumption today ((1+1Jel) versus consumption in the future (0+τ)G), where t is the rate of taxation on consumption (HST). Households are constrained...
1. Are increases in both government purchases and net taxes at the same time expansionary or contractionary? Would both changes together increase or decrease the federal government deficit?
Homework #8 1. Are increases in both government purchases and net taxes at the same time expansionary or contractionary? Would both changes together increase or decrease the federal government deficit?
Question 12 (1 point) Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good? Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. Equilibrium quantity would increase, but the impact on equilibrium price would...
i understand why a decrease in tax will increaseconsumotion
but i dont understand why a future tax raise will also increase
consumption.
in this case, does ricardian equivalence hold? thank you
6:41 PM Wed Oct 30 TODO+ Xaxes) may be advantageous because 54% + 8 0 A) it discourages credit-constrained consumers from borrowing too much. B) it increases the welfare of credit-constrained consumers. C) it eliminates the problems that cause credit market imperfections. D) it encourages more private savings. E)...
ents is true concerning the consumption function et e n between ale Ince ction lies above the 45-degree line, then that is independent of the level of disposable income is a. It alopes upward. b. Ito alope equals the MC. It represents the direct positive relation naumption spending and the level of real If the consumption function lies above saving is positive. e. All of the above. 9. Consumption spending that is independent of the known as: a marginal consumption....
Question 1 (1 point) If we represents a two-period consumer's lifetime wealth and r denotes the real rate of interest, the slope of the consumer's budget line is equal to Or (1+we) O-1/(1+r) Orxwe. -(1+r) O-r/(1+we) Question 2 (1 point) Intertemporal decisions are economic decisions O involving trade-offs across periods of time. O made in between two periods of time. that ignore concerns about the future. that are made only once. O made within a given period of time. Question...
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