POSITIVE INCENTIVES:
-Tax Reductions -Lower Prices -Tax Returns |
NEGATIVE INCENTIVES:
-Raise in Taxes -Higher Prices -Lower Wages |
*When incentives are used, there is a usual pattern seen among citizens.
-Fluctuations in prices result in changes of how many goods/services are sold.
-Higher prices cause people to keep their wallets closed and make less frequent purchases in the market.
-Lower prices influence people to buy more.
-Differences in wages that employees earn will change both the quantity and quality of work being done.
-Many people work will work longer and harder for higher wages. Firms, however, attempt to hire a small amount
of workers if wages are higher.
-For lower wages, a typical pattern is evident, too. Lower wages don't motivate employees to work hard or for
extended periods of time. In this case, firms are able to higher a large number of workers for a smaller price.
-Variations in interest rates affect incentives, too.
-Higher interest rates cause people to not want to borrow money to buy items such as cars or houses.
-Lower interest rates, however, influence people to borrow money for purchases that require loans.
-Firms earn greater profits when the rate is lower because more people buy the firms' products.
*Responses to incentives are usually the same each time around.
-Fluctuations in prices result in changes of how many goods/services are sold.
-Higher prices cause people to keep their wallets closed and make less frequent purchases in the market.
-Lower prices influence people to buy more.
-Differences in wages that employees earn will change both the quantity and quality of work being done.
-Many people work will work longer and harder for higher wages. Firms, however, attempt to hire a small amount
of workers if wages are higher.
-For lower wages, a typical pattern is evident, too. Lower wages don't motivate employees to work hard or for
extended periods of time. In this case, firms are able to higher a large number of workers for a smaller price.
-Variations in interest rates affect incentives, too.
-Higher interest rates cause people to not want to borrow money to buy items such as cars or houses.
-Lower interest rates, however, influence people to borrow money for purchases that require loans.
-Firms earn greater profits when the rate is lower because more people buy the firms' products.
*Responses to incentives are usually the same each time around.