A worker within the middle-income class is preparing to retire. In the year before he retired, his gross monthly earnings are $2,500. His Social Security benefits will be $1,500 per month. Before he retired, his income was subject to a tax of 30 percent. Find his before-tax and after- tax replacement rates.
What will be an ideal response?
His before-tax replacement rate would be 1,500/2,500 = 0.60. His after-tax replacement rate
would be 1,500/1,750 = 0.86.
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The labor ____________ curve(s) will shift _______________ if there is an increase in productivity or an increase in the demand for the final product.
a. demand; left b. supply; left c. demand; right d. supply; right
Which of the following would be an example of an inferior good?
a. A small pack of cigarettes b. A cheap cut of meat c. A small bottle of milk d. A large bag of cornflakes
Which of the following is incorrect?
A. Floating exchange rates permit countries to have different inflation rates. B. Overall, floating exchange rates discipline countries to have low inflation rates. C. With fixed exchange rates, a country that prefers to have a lower inflation rate than its trading partners will tend to import inflation from its partners. D. Since 1973, high degrees of variability of floating exchange rates may have caused considerable adjustment into or out of trade-oriented production from time to time.
Which of the following will, unambiguously, increase the price level?
A. an increase in government spending and an increase in the Z factors B. an increase in government spending and a decrease in the Z factors C. a decrease in government spending and an increase in the Z factors D. a decrease in government spending and a decrease in the Z factors