Optimal tax in his article titled "Using Elasticities to Derive Optimal Income Tax Rates" derives a formula for optimal level of income tax using the both compensated and uncompensated elasticities. Saez writes the tradeoff between equity and efficiency is a central consideration of optimal taxation, and implementing a progressive tax allows the government to reallocate their resources where they are needed most. However, this deters those of higher income levels to work at their optimal level. Saez decomposes the marginal effects of a tax change into mechanical, behavioural and welfare effects, as follows: The sum of these effects should be zero at
Notional amount able to purchase. Hence the notional principal amount is the quantity of the assets and bonds. In the context of an interest rate swap, the notional principal amount is the specified amount on which the exchanged interest payments are based; this could be 8000 US dollars, or 2.7 million pounds sterling, or any other combination of a number and a currency. Each period's rates are multiplied by the notional principal amount to determine the height and currency of each counter-party's payment. A notional principal amount is the amount used as a reference to calculate the amount of interest due on