The annual return to savings is currently $100 billion per year in a certain nation. The estimated value of wealth in the nation is $1 trillion. Calculate the percentage gross return to savings. Assuming that the supply of saving is perfectly inelastic, calculate the impact of a 1 percent tax on wealth on the gross and net percentage return to savings. How would your answer differ if the interest elasticity of supply of savings were positive rather than zero?
Answer to relevant QuestionsThe following table shows how the total social benefit and total social cost of summer outdoor concerts in Central City vary with the number of performances. Economists argue that there is an efficient amount of pollution abatement. Explain why the efficient amount of abatement is unlikely to be either zero or 100 percent. List all the information that would be required to ...A new tax is levied on airline profits to finance improvements in the nation's airports. The current market rate of interest is 8 percent. However, airline profits are subject to a 50 percent tax. A cost-benefit analysis ...A parcel of land is expected to yield annual rents equal to $10,000 per year forever. If the market rate of interest is 10 percent, calculate the market price of the parcel. Suppose you purchase the parcel of land. After ...The elasticity of the property tax base for the town of Elderberry is estimated to be 22. Assuming that this estimate is correct, what effect would a 10 percent increase in the property tax have on property value and tax ...
Post your question