An employer offers his or her employee the option of shifting x units of income from next

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An employer offers his or her employee the option of shifting x units of income from next year to this year. That is, the option is to reduce income next year by x units and increase income this year by x units.

(a) Would the employee take this option (use a diagram)?

(b) Determine, using a diagram, how this shift in income will affect consumption this year and next year and saving this year. Explain your results.

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Macroeconomics

ISBN: 978-0132991339

5th edition

Authors: Stephen d. Williamson

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Question Posted: Dec 05, 2014 09:58 AM

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An employer offers his or her employee the option of shifting x units of income from next

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This problem involves a firms offer to provide an interestfree ...View the full answer

Macroeconomics

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