In some cultures, when a member of the community who is ineligible for government provided social insurance faces some adverse condition, the rest of the community lends that member money until his or her condition improves. In these cultures, would you expect more or less buffer-stock savings than occurs in the United States? Explain.
Answer to relevant QuestionsConsider a model in which individuals live for two periods and have utility functions of the form U = ln(C1) + ln(C2). They earn income of $100 in the first period and save S to finance consumption in the second period. The ...Prior to 1997, many university professors who moved from expensive places like Boston or San Francisco to low-cost cities like Madison, Wisconsin, or Gainesville, Florida, tended to purchase extremely large houses upon their ...Estoluania is considering replacing its progressive tax system with a flat tax that would raise equal revenue. How could this change encourage risk-taking behavior? How could it discourage risk-taking behavior? Suppose that dividend yield is 6%, depreciation is 12%, and the corporate tax rate is 35%. What would be the marginal cost of each dollar of machinery investment under the following situations? a. Firms are allowed to ...Megacola faces demand of Q = 2,200 – 20P. Its costs are constant at $5 per unit. a. Show that Megacola will not change its behavior if the government introduces a 20% tax on its profits. b. Does the existence of firms such ...
Post your question