Erin just won Lotto America, which will pay her $40 million over the next 20 years at a rate of $2 million a year. Is Erin $40 million richer today?
Even though Erin will eventually receive $40 million, she would not be considered that wealthy today. Income to be received in the future is discounted to determine its present value. Also, for purposes of determining Erin's wealth, we would need to consider current and future tax liability.
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Which of the following indicates whether the good in question is normal or inferior?
a. cross-price elasticity of demand b. income elasticity of demand c. equilibrium elasticity of demand d. unit-price elasticity of demand
Using Figure 8.7, a shift in aggregate demand from AD4 to AD5 is most likely to cause
A. An increase in real output but no change in the price level. B. An increase in price level but no change in real output. C. A decrease in price level but no change in real output. D. An increase in real output and an increase in the price level.