When workers save less during their working lives due to the fact that they have been paying Social Security taxes, this is known as
A. the Social Security effect.
B. the wealth substitution effect.
C. the bequest effect.
D. the life cycle hypothesis.
B. the wealth substitution effect.
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Suppose you know a piece of land will be worth $1 million (real) in 2025, and the real interest rate is 5%. About how much should you be willing to pay for the land today (20150)? (Assume no taxes)
a. $610,000 b. $1 million c. $1.89 million d. $230.000
Evan left a job in which he was earning $75,000 a year for one he liked better but pays only $50,000 a year. Around the same time as the job switch, Evan needed to buy a new car. Had he kept his old job he would have bought a new car but instead he was forced to buy a used car. Therefore
a. used cars are normal goods for Evan b. new cars are inferior goods for Evan c. the supply curve for new cars shifted to the left d. new and used cars are complements e. used cars are inferior goods for Evan
Briefly explain how the term “price maker” is related to monopolies.
What will be an ideal response?
An economy that operates inside its production possibility curve is less efficient than it would be if it were operating on its production possibility curve.
Answer the following statement true (T) or false (F)