3)With respect to the marginal benetit from vacations, suppose that in 2020 employees earned $ 50,000 in vacations and used half of that benefit. The other half will be used in 2021. Vacation spending for 2020 will be: A. $ 50,000 b. $ 25,000 c. $ 25,000 plus the amount they use in 2021 before the 2020 financial statements are released

3)With respect to the marginal benetit from vacations, suppose that in 2020 employees earned $ 50,000 in vacations and used half of that benefit. The other half will be used in 2021. Vacation spending for 2020 will be: A. $ 50,000 b. $ 25,000 c. $ 25,000 plus the amount they use in 2021 before the 2020 financial statements are released

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume an economy with 1000 consumers. Each consumer has income in the current period of 50 units and future income of 60 units, and pays a lump-sum tax of 10 in the current period and 20 in the future period. The market real interest rate is 8%. Of the 1000 consumers, 500 consume 60 units in the future, while 500 consume 20 units in the future. a) Determine each consumer's current consumption and current saving. b) Determine aggregate private saving, aggregate consumption in each period, government spending in the current and future periods, the current-period government deficit, of the quantity of debt issued by the government in the current period. c) Suppose that current taxes increase to 15 for each consumer. Repeat parts (a) and (b) and explain your results.
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