Principles of Economics (Second Edition)
2nd Edition
ISBN: 9780393614077
Author: coppock, Lee; Mateer, Dirk
Publisher: W. W. Norton & Company
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Chapter 22, Problem 3QFR
To determine
(a)
To explain:
The allocation of retirement funds, if
To determine
(b)
To explain:
The changes in the macroeconomy when national savings rate is merely based on saving in banks.
To determine
(c)
To explain:
The effect of investment expenditure made on stocks, bonds or real estate on national saving rate.
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You're currently 20 years old, anticipate a natural life of 80 years and a work life of 40 years (retire at the age of 60). You estimate your income from work will be $4,500,000.
a. What is your level of permanent consumption?
b. What is the level of savings you will have when you retire?
c. If at the age of 45 you receive a bonus of $100,000, how will this impact your permanent consumption? Over what time period.
How does savings change with changes in y2? Provide some intuition behind this result.
Why is savings equal to investment
Chapter 22 Solutions
Principles of Economics (Second Edition)
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