Examlex

Solved

Suppose Tastes for Consumption Now and Consumption in the Future

question 4

True/False

Suppose tastes for consumption now and consumption in the future have constant elasticity of substitution.It may then be the case that a tax on interest income is efficient even if savings (defined as current income not consumed) fall in response to the tax.


Definitions:

Quality of Inputs

The standard or grade of raw materials and labor used in the production process, influencing the efficiency and outputs.

Standard of Living

A measure of the wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.

Productivity

The measure of the efficiency of production, often defined as the ratio of output produced to inputs used.

Net Exports

The value of a country's total exports minus its total imports, reflecting the balance of trade.

Related Questions