What Would You Do With The Money?


Sae-byeok and Gi-hun discuss what they would do if they won the jackpot. Winning that amount of money would be an example of a pure income effect since their relative wage rate is unchanged. This increase in income would result in the two purchasing more normal goods (like buying homes, more leisure, or purchasing gifts) and reducing inferior goods (like the reliance on debt). Some of this money may end up in savings, but they don't tell us that explicitly. That determination would be based on each person's marginal propensity to save.

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