What are three reasons that employees may prefer to save through pensions provided by employers rather than through savings accounts?
What will be an ideal response?
First, pension funds may be able to manage a financial portfolio more efficiently, with lower transactions costs, than employees can. Second, pension funds may be able to provide benefits such as life annuities, which are costly for individual savers to obtain on their own. Third, the special tax treatment of pensions can make pension benefits more valuable to employees than cash wages.
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Using Figure 1 below, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P3 and Y2.
C. P2 and Y1.
D. P3 and Y1.
In reality international trade is determined solely by comparative advantage and the free market forces of supply and demand
a. True b. False Indicate whether the statement is true or false
Which statement is true?
A. There are many firms in a monopolistically competitive industry. B. Monopolistic competitors produce an identical product. C. In order for product differentiation to take place, there must be clear physical differences among the products sold. D. None of these statements are true.
Which of the following would indicate that a firm is facing diminishing marginal product?
a. marginal costs increase a. average costs decrease b. average total costs are flat c. the level of output increases