Compare and contrast the "life cycle" hypothesis and the "permanent income" hypothesis. What are their respective implications for inequality in the income distribution?

I answered: Let’s begin by understanding the difference between the life cycle hypothesis and permanent income, we have to understand the life cycle and the permanent income hypothesis.The life-cycle hypothesis (LCH) is an economic theory that describes the spending and saving habits of people throughout a lifetime. The concept was developed by Franco Modigliani and his student Richard Brumberg in the early 1950s.The theory is that individuals seek to smooth consumption throughout their lifetime by borrowing when their income is low and saving when their income is high.The LCH assumes that individuals plan their spending over their lifetimes, taking into account their future income. Accordingly, they take on debt when they are young, assuming future income will enable them to pay it off.They then save during middle age in order to maintain their level of consumption when they retire. A graph of an individual's spending overtime thus shows a hump-shaped pattern in which wealth accumulation is low during youth and old age and high during middle age.The permanent income hypothesis is a theory of consumer spending, stating that people will spend money at a level consistent with their expected long-term average income.The level of expected long-term income then becomes thought of as the level of "permanent" income that can be safely spent. A worker will save only if his or her current income is higher than the anticipated level of permanent income, in order to guard against future declines in income.The permanent income hypothesis was formulated by the Nobel Prize-winning economist Milton Friedman in 1957. The hypothesis implies that changes in consumption behavior are not predictable because they are based on individual expectations.Even if economic policies are successful in increasing income in the economy, the policies may not kick off a multiplier effect from increased consumer spending.Instead, the theory predicts there will not be an uptick in consumer spending until workers reform expectations about their future incomes.It is now clear from the above the difference between the two, so we can conclude that if there is some similarity between the two, then there are some inequalities which we can see as follows:Would it be correct to say that the Permanent Income Hypothesis (PIH) stipulates that current consumption decisions are made based on future income projections/expectations, while the Life-Cycle Hypothesis (LCH) claims that consumption is constant over the average person's lifetime, and this is made possible, despite changes in income level throughout his/her lifetime, through borrowing when younger and savings during the elderly years?This contribution aims to discuss carefully the implications of income inequality and the economic policies to tackle it, especially so because of inequality being one of the leading causes of the 2008 international financial crisis and the "great recession" that subsequently emerged.Wealth inequality is also essential in this respect, but the focus is on income inequality.Ever since the financial crisis and the subsequent "great recession," inequality of income and wealth, has increased and the demand for economic policy initiatives to produce an equal distribution of income and wealth has become more urgent.Reduction would help to increase the level of economic activity as has been demonstrated again more recently. Several economic policy initiatives for this purpose will be the focus of this contribution.

Any edits and corrections?

On Valentine’s Day, the price of roses increases by more than the price of greeting cards. Why? (Hint: Consider what makes roses and cards different and how that difference might affect supply’s responsiveness to price.)

please help and explain and do good 150-200 words

Consider a public good with only two consumers, A and B. The demand function by Customer A is Q = 10 - 0.5P, while the demand function by Customer B is Q = Q = 10 - 0.25P, where Q is quantity demanded and P is price. Construct the market demand curve for the public good. If a company can produce the public good at a constant marginal cost of $30, what is the market equilibrium price and quantity of the public good?

Please answer in 300 words:

The federal government and the Fed usually try to coordinate their efforts in order to keep the economy stable. However, there are times when the government and the Fed work against each other without intending to. For example, in 2012, Congress passed a universal healthcare plan called The Patient Protection and Affordable Care Act. This law was passed during a time when the Fed was working to stimulate economic spending through monetary policy. However, taxpayers knew that the new law would eventually result in higher taxes. Some economists argued that the passage of the law was one of the reasons that monetary policies had little effect as businesses and consumers continued to hold their money in anticipation of increased taxes.

• In what ways do you think The Patient Protection and Affordable Care Act might affect the economy? Explain your answer.
• In what ways do you think this type of program affects the aggregate-demand curve? The aggregate-supply curve? Explain your answers.

1. Explain why a monopolist’s profit when he price discriminates cannot be less than his profits when he does not price discriminate.

2. The efficiency loss under perfect price discrimination is very high. True or False?

3. Consider a monopolist selling into two markets. Demand in the first market is given by P₁ = 50 - 2Q₁, and demand in the second market is given by P₂ = 70 - 2Q₂. Total cost for the monopolist is 50 - 10(Q₁ + Q₂), so marginal cost is 10.

1. What are the quantities and prices sold in each of the two markets?
2. What condition must hold in order for the monopolist to practice this kind of price discrimination?

Based on the course learning objectives listed below, explain the most important concepts you learned from this course and how you think you might apply these concepts in your future career? Course Objectives Outline a communication plan for a public health emergency. Identify factors involved in risk communication. Outline the principles of modern quarantine. Summarize responses to pandemics.

• Outline a communication plan for a public health emergency.
• Identify factors involved in risk communication.
• Outline the principles of modern quarantine.
• Summarize responses to pandemics.

Organizations are made up of-interrelated sub-parts. If-any one of-these subparts performs poorly, it will negatively affect the performance of-the whole-system.?

Mesopotamia, India, and China had three of the earliest economic networks. How did their respective trade systems develop? Discuss how iron was a significant factor in these early economies.

Hello Economist,

This week your assignment covers time travel. I own a time machine, yes, I keep it in my garage of course. I will make you an offer you might refuse. I will transport you back to England in 1776, but you must stay in the year 1776. If you wish you can bring up to 12 family members, no pets. Also if you choose to go back in time 100 acres of land will be provided. A castle on the land is also provided and along with a full staff and a standard trunk full of gold. Remember, this is a one way trip without a second chance to return to the twenty-first century.

The alternative is to still in the present and work at the Java Café (new coffee experience) for $75,000 per year as an assistant manager.

1. Suppose the data for a hypothetical economy is given above. This economy produces only 3 things, pizzas, haircuts and tanks. The base year is 2019.

1. Calculate GDP deflator in 2020. Based on GDP deflator, what is the inflation rate from 2019 to 2020?
2. Suppose a representative consumer basket consists of 10 pizzas and 20 haircuts. Using this consumer basket, calculate CPI in 2020 (again, assuming 2019 is the base year). Based on CPI, what is inflation rate?
3. Why do you think there is such a dramatic difference in the inflation rates from parts a and b?

Companies collect a wide variety of information about their foreign markets to decide in which countries to conduct business and which market segments in these markets they should target. What are the three major markets that exist in all foreign markets? Describe the markets and provide an example of each.

For this discussion question, you must support your analysis with a peer-reviewed article.

What factors contributed to the stagflation of the 1970s? How did Volker deal with the high inflation? Did high oil prices cause the stagflation or was it something else? Is the Fed independent? If so, how do our leaders ensure they maintain the best interests of the public? How does Milton Friedman establish his view that inflation is a monetary issue? According to Friedman, do trade unions cause inflation by pushing up wages and the cost of production?

An economy has a Cobb–Douglas production function:

Y=K^α(LE)^1-α

The economy has a capital share of 0.35, a saving rate of 43 percent, a depreciation rate of 3.50 percent, a rate of population growth of 3.50 percent, and a rate of labor-augmenting technological change of 2.5 percent. It is in steady state.

a.) Solve for capital per effective worker (k*), output per effective worker (y*), and the marginal product of capital.

K*=?

y*=?

marginal product of capital= ?

Microeconomics

How does monopolistic competition differ from perfect competition? “

As monopolistic competition leads to excess capacity, there will be an unambiguous social gain if government regulation reduces the number of firms and eliminates excess capacity.”

What is meant by excess capacity? Demonstrate (on a graph) that monopolistic competition leads to excess capacity.

Do you agree or disagree with the statement’s policy recommendation? Why? Explain?

Suppose that a country’s inflation rate increases sharply. Explain what happens to inflation tax on the holders of money? .  Can you think of anyway in which holders of savings accounts are hurt by the increases in the inflation Rate?