Consider the following effects of an increase in taxes for a consumer. (a) The consumers taxes increase
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(a) The consumer’s taxes increase by ∆t in the current period. How does this affect current consumption, future consumption, and current saving?
(b) The consumer’s taxes increase permanently, increasing by ∆t in the current and future periods. Using a diagram, determine how this affects current consumption, future consumption, and current saving. Explain the differences between your results here and in part (a).
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a The increase in firstperiod taxes induces a parallel leftward shift in the budget line The origina...View the full answer
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Tapaswani Sethi
I am presently pursuing life science and has discovered a new side of biology basically how cryptic the world around us is ,and just with right knowledge and curiosity the nature's detail works can be uncovered ,this is what interest me this I try to make others uncover these mysteries and to relate,that it's seems simple but has so much of depth in it. I have been teaching as a tutor to Juniors and high school students and my way is to explain more diagrammatically with necessary descriptions and to understand the process using an analogy somewhat relatable to it. One learns more by teaching and helping others quench their curiosity for curiously asked questions are the way to more discoveries,thus this is my motive.
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