Draw me some diagrams: The diagram would show two intersecting lines representing the supply and demand for
Question:
Draw me some diagrams: The diagram would show two intersecting lines representing the supply and demand for assets. The vertical axis would represent the price of the asset, while the horizontal axis would represent the quantity of the asset.
The supply curve would slope upwards from left to right, indicating that as the price of the asset increases, the quantity of the asset supplied also increases. The demand curve would slope downwards from left to right, indicating that as the price of the asset increases, the quantity of the asset demanded decreases.
The diagram would also include a vertical line representing the initial equilibrium price and quantity of the asset. If the capital gains tax increases, the supply of assets will decrease as wealthy Americans may be less willing to invest. This would shift the supply curve to the left, resulting in a new equilibrium point with a lower quantity of assets and a lower price. This decrease in demand would lead to a decrease in the equilibrium price and quantity of assets.
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba