Showing 111 to 120 of 5724 Questions
  • When the income-tax rate declines, as it did in the United States early in this decade, does the multiplier go up or down? Explain why

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    118
  • Discuss the pros and cons of having a higher or lower multiplier.

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    137
  • Consider an economy in which tax collections are always $400 and in which the four components of aggregate demand are as follows:. Find the equilibrium of this economy graphically. What is the marginal propensity to consume? What is the multiplier? What would happen to equilibrium GDP if government purchases were reduced by $60 and the p

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    274
  • Consider an economy similar to that in the preceding question in which investment is also $200, government purchases are also $500, net exports are also $30, and the price level is also fixed. But taxes now vary with income and, as a result, the consumption schedule looks like the following:Find the equilibrium graphically. What is the m

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    202
  • Return to the hypothetical economy in Test Yourself Question 1, and now suppose that both taxes and government purchases are increased by $120. Find the new equilibrium under the assumption that consumer spending continues to be exactly three-quarters of disposable income

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    113
  • Suppose you are put in charge of fiscal policy for the economy described in Test Yourself Question 1. There is an inflationary gap, and you want to reduce income by $120. What specific actions can you take to achieve this goal?

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    113
  • Now put yourself in charge of the economy in Test Yourself Question 2, and suppose that full employment comes at a GDP of $1,840. How can you push income up to that level?

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    124
  • Which of the following is considered a fixed tax and which a variable tax?a. The gasoline taxb. The corporate income taxc. The estate taxd. The payroll tax

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    158
  • In a certain economy, the multiplier for government purchases is 2 and the multiplier for changes in fixed taxes is 1.5. The government then proposes to rise both spending and taxes by $100 billion. What should happen to equilibrium GDP on the demand side?

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    109
  • Suppose real GDP is $10,000 billion and the basic expenditure multiplier is 2. If two tax changes are made at the same time: a. fixed taxes are raised by $100 billion, b. the income-tax rate is reduced from 20 percent to 18 percent, will equilibrium GDP on the demand side rise or fall?

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    157