Cliff Effect


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Cliff Effect

In economics, the disproportionately positive or negative results of an action. For example, suppose a company takes on too much debt and a credit ratings agency downgrades its bond rating. This may increase the company's borrowing costs significantly, which in turn gives it less cash on hand to make coupon payments. This can lead to a further downgrade and the cycle continues. The cliff effect implies that relatively little separates a company from being seen as quite healthy to being seen as a poor investment.
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"The intent of this program is to help Colorado families by providing support as they gradually move away from needing assistance, rather than experiencing a cliff effect where assistance is immediately cut off due to a wage earner receiving a raise.
All these efforts are designed to support parents, make child care more affordable and, hopefully, eliminate the cliff effect. If things go well, parents will be able to embrace their jobs and take on new challenges--and pay raises--without losing child care assistance.
This approach maximizes benefits for those most in need and avoids creating a sudden drop off in benefits or a "cliff effect." (4) The current EITC eligibility, maximum benefit levels, and phase-out ranges are outlined in Table 1, above.
The term "cliff effect" is not a technical term and, as such, has no common definition.
(38) A cliff effect thus exists with respect to the voting power and the stock ownership post-acquisition, because if only 79% of the voting power is held by the acquiring corporation, then the acquisition becomes a taxable event.
A decrease in received C/N will make the DTV receiver go from a clear and no error picture to a "picture freeze" (the so-called cliff effect).
This is expected as part of the mentioned "cliff effect." Nevertheless, in many other cases, even with high percentages of packet loss, the video quality is only partially degraded, and acceptable values for the MOS are obtained.
In 11 out of 12 yr, the cliff effect was highly significant.
The interactions between the previous year's local reproductive success with the year effect ([F.sub.10, 181] = 1.22, P = 0.28) and with the cliff effect ([F.sub.30, 140] = 1.00, P = 0.47) indicated that these relationships did not differ among years and cliffs.
An estimate of the value of the cliff effect can be derived from examining the costs incurred by individuals participating in cross-border shopping.
Not every taxpayer with an income beyond the cliff effect threshold suffers an equity loss; at some level of income greater than the cliff effect threshold the economic loss of the equity cost of the cliff effect is outweighed by the additional income.
(135) To the extent that taxpayers do not or cannot reduce their income when confronted with an income-based cliff effect, the burden of the cliff effect becomes an equity violation rather than the inefficiency of a deadweight loss.