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8 Dec 2017

61) Suppose that the government institutes a new mandatory public pension plan that forces the household contribute 200 in the present and will pay the household a retirement benefit of 300 in the future. If the household did NO private saving its (Cp, Cf) bundle would be: A) 1000; 300 B ) 800; 0 C) 800; 200 D 800; 300 E) 200; 300

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Bunny Greenfelder
Bunny GreenfelderLv2
11 Dec 2017
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Related questions

62) Suppose the interest rate is r = 20% and the government institutes a mandatory public pension plan where the household must pay a premium of 300 in the present, but will receive a benefit of 360 to consume in the future. Relative to the (CP, CF) bundle (700, 360), the household will: A) do nothing, it will consume the bundle B) engage in private saving to increase both Cp and CF C) engage in private saving to decrease Cp and increase CF D) engage in private borrowing to increase Cp and decrease CF E) engage in private borrowing to increase both Cp and CF

64) Now suppose that the government institutes the mandatory public pension plan where the household must pay a premium of 350 in the present, but will receive a benefit of 490 to consume in the future (as in 63) above. But suppose the interest rate is r = 20%. Relative to the (Cp Cp) bundle (650, 490), the household will: A) do nothing, it will consume the bundle B) engage in private saving to increase both Cpand C C) engage in private saving to decrease Cp and increase C D) engage in private borrowing to increase Cp and decrease C E) engage in private borrowing to increase both Cp and CF

63) Suppose the interest rate is r' = 40% and the government institutes a mandatory public pension plan where the household must pay a premium of 350 in the present, but will receive a benefit of 490 to consume in the future. Relative to the (Cp Cp) bundle (650, 490), the household will: A) do nothing, it will consume the bundle B) engage in private saving to increase both Cp and CA C) engage in private saving to decrease Cp and increase C D) engage in private borrowing to increase Cp and decrease C E) engage in private borrowing to increase both Cp and CF

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