Suppose congress abolishes this law draw the appropriate


Let's think about how the supply of savings might shift in two different cases.

2265_supply curve.png

a. Under current U.S. law, businesses are allowed to automatically enroll you in a savings plan that puts 5% of your salary in a retirement fund. Suppose Congress abolishes this law: Draw the appropriate shift in the supply curve and label it "a."

b. If Americans all go to see the classic Robin Williams/Ethan Hawke film Dead Poets Society and decide to carpe diem, or if they read the quotes of a famous Mediterranean preacher who said, "Take therefore no thought for the morrow," or if they watch the appalling 1970s sitcom One Day at a Time, what direction is the supply of savings likely to shift? Denote this with a new supply curve labeled "b."

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Corporate Finance: Suppose congress abolishes this law draw the appropriate
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