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"In the Solow model, an economy that starts with a higher stock of capital per capita will reach a higher steady state level of capital per capita"
Show that equation (1) implies that per capita investment is also a constant fraction of per capita income. Which equation, which was not stated in the set up of this question, do you need to show thi
State the commodity in which each country has absolute advantage and Identify the commodity of comparative advantage for each country
Explain whether there is a relationship between inflation and unemployment and should government interfere and reduce inflation and unemployment?
Assume that Mf = Ma. Find the real wage that makes total labor supply and total labor demand exactly equal to each other (this is called, the equilibrium real wage). Find the equilibrium number of hou
Consider now the decision problem of the agents. Let n denote the number of hours per month that an agent works. Write an equation relating n and l. Write the agents budget constraint. Express the bud
If an agent is liquidity constrained, then an unexpected increase in transitory income of $100 can result in the agentís current consumption increasing by $100"
Suppose that the production function is given by Y = C + KaN1-a where C is a positive constant. Does an increase in C affect the marginal product of any factor? Will it affect labor productivity?
Skill-biased technical change, through its effect on labor supply of skilled and unskilled workers, can generate an increase in wage inequality"
A question facing many U.S. states is whether to allow casino gambling. States with casino gambling have seen a substantial increase in tax revenue flowing to state government. This revenue can be
Explain how each of the following variables will be affected by proposed steps that you have identified in the first part of the discussion: money supply, interest rates, inflation rate, aggregate dem
If Kevin agrees to an $18,500 alimony payment, what is the after-tax cash flow for Kevin and Elizabeth? By how much does their cash flow improve over the proposed $15,000 payment?
Palace Company (an accrual-basis taxpayer) is writing the lease agreements for its new apartment complex, Palace Apartments, which will rent for a minimum of $2,000 per month
Sandra, a single taxpayer in the 35 percent marginal tax bracket, has $60,000 she can invest in either corporate bonds with a stated interest rate of 9 percent or general revenue bonds issued by her m
Robert plans to start a new business that he expects will experience steady growth in profits for the next 15 years. He needs to select a method of accounting to use: cash or accrual.
Compute Pierre Lappin’s adjusted gross income by entering the following information on Form 1040: $50,000 salary, $5,000 qualified dividend income, $3,000 interest income from corporate bonds
Determine how much of the Social Security benefits must be include in income for a single individual who had $20,000 in dividend income and $5,000 in interest from tax-exempt bonds in addition to rece
In December, year 1 Sid's Body Shop (an accrual-basis taxpayer) did repair work on Lisa's car and was to be paid $2,000 by her insurance company.
A landlord requires tenants to pay at the beginning of their lease an amount equal to 3 months of rent. He informs the tenants that this is for the first month's rent, the last month's rent, and a ref
Jason owns a computer repair shop. Jason needs some repair work done on his company car, so he agrees to repair the computer at Bob's Auto Repairs in exchange for fixing the car.
Walter used the cash method to account for income from his cattle ranch. During an audit in year 3, the IRS auditor discovered a document from a customer indicating that Walter sold 115 head of cattle
Joe owes Willy $5,000 from an old gambling debt. Joe knows that there is no way he can repay the debt in the near future. He asks Joe if he will take a $25,000 life insurance policy that has a cash su
John and Mary are divorcing. John is demanding that Mary pay him $75,000 of alimony in the first year after the divorce, $50,000 in the second year, and $25,000 in the third and all subsequent years u
Some politicians have proposed changing the way social security benefits are taxed. One proposal would increase the amount of Social Security benefits included in gross income to 100 percent
Your friend tells you that she read an article about something called “janitor's insurance.” The article said that companies took out life insurance policies on some, if not all, of their