public_ps7_fall07 - PAM 204 PS #7 Part A Suppose that the...

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PAM 204 PS #7 Part A Suppose that the government simultaneously increases the subsidy to IRA’s and implements an investment tax credit. Depict this situation in a diagram. What will be the effect on the equilibrium interest rate and the equilibrium quantity of loanable funds? (Assume that the supply and demand curves in the loanable funds market are neither perfectly elastic nor perfectly inelastic. Assume that the SE dominates the IE regarding savings decisions.) (5 points) Part B Read this article: http://www.pkarchive.org/economy/TaxCutCon.html It is from “The Unofficial Paul Krugman Web Page.” The MC questions are worth ½ point each. #1) The US collected roughly _____ percent of its GDP in total taxes in 2000. A. 30% B. 50% #2) The US collects a _____ percent of its GDP in total taxes than does France. A. lower B. higher #3) Families in the middle of the income distribution in the US pay roughly _____ percent of their income in taxes today. A. 26% B. 52% #4) The top marginal income tax rate today is roughly ____ in the 1970s. A.
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This note was uploaded on 03/30/2008 for the course PAM 2040 taught by Professor Lewis during the Fall '07 term at Cornell University (Engineering School).

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public_ps7_fall07 - PAM 204 PS #7 Part A Suppose that the...

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