2.11. Using the phase diagram to analyze the impact of an anticipated change. Consider the policy described in Problem 2.10, but suppose that instead of announcing and implementing the tax at time 0, the government announces at time 0 that at some later time, time t1, investment income will begin to be taxed at rate T. (a) Draw the phase diagram showing the dymamics of c andk after time t. (b) Can c change discontinuously at time t,? Why or why not? (c) Draw the phase diagram showing the dynamics of c and k before t.

2.11. Using the phase diagram to analyze the impact of an anticipated change. Consider the policy described in Problem 2.10, but suppose that instead of announcing and implementing the tax at time 0, the government announces at time 0 that at some later time, time t1, investment income will begin to be taxed at rate T. (a) Draw the phase diagram showing the dymamics of c andk after time t. (b) Can c change discontinuously at time t,? Why or why not? (c) Draw the phase diagram showing the dynamics of c and k before t.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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C=725 + 0.65Yd Taxes = 600 Equilibrium Output = $4,000 the sum of investment and government purchases in Canada is: A) 1000 B) 1090 C) 1190 D) 1065 2-If you save $300 when you experience a 400 rise your income: A) your MPC is 0.25 B) your MPC is 0.75 C) your MPS is o.25 D) your MPS is o.40 Solve all of them
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