Explain carefully why the tax multiplier [Y/T = -b / (1 - b)] is negative and why
Question:
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 87% (8 reviews)
The tax multiplier is negative because an increase in ta...View the full answer
Answered By
Junaid ahmed
I am an English language professor with years of experience In Teaching English Language and Literature. I like to help people in the various difficult matter.
5.00+
2+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Economics questions
-
Explain carefully why the futures price of gold can be calculated from its spot price and other observable variables whereas the futures price of copper cannot.
-
Explain in words and using the notion of expenditure rounds why the tax multiplier is smaller than the expenditure multiplier.
-
Suppose that within the open-economy version of the Keynesian model in Section 7, we now include taxes. Disposable income (YD = Y - T) therefore replaces GDP (Y) in the consumption function (24)....
-
Randy, Inc., can issue 3-month commercial paper with a face value of $1,500,000 for $1,450,000. Transaction costs will be $1,500. The effective annualized percentage cost of the financing, based on a...
-
The trial balances before and after adjustment for Matusiak Company at the end of its fiscal year are presented below. Instructions Prepare the adjusting entries that weremade. Matusiak Company Trial...
-
WinterWearhouse operates a clothing store specializing in ski apparel. Given the seasonal nature of its business, often there is somewhat of an imbalance between when bills must be paid for inventory...
-
Match the term with its definition by placing the corresponding letter in the space provided: 1. A written promise to pay a specified amount of money at a particular future date 2. The date when...
-
On January 1, 2010, Point Corporation acquired an 80% interest in Sharp Company for $2,000,000. At that time Sharp Company had capital stock of $1,500,000 and retained earnings of $700,000. The book...
-
Discuss 2 Hypoteses. Hypothesis 1: Consumers are loyal to Coca -Cola due to its flavor. hypothesis 2: Consumers are loyal to Coca Cola becaise they do not perceive it as an unhealthy drink.
-
There is a lottery with n coupons and n people take part in it. Each person picks exactly one coupon. Coupons are numbered consecutively from 1 to n, n being the maximum ticket number. The winner of...
-
In the simple Keynesian model, an increase of 1 dollar in autonomous expenditure will cause equilibrium income to increase by a multiple of this 1-dollar increase. Explain the process by which this...
-
Suppose that initially equilibrium income was 200 units and that this was also the full-employment level of income. Assume that the consumption function is C = 25 + 0.8YD And that, from this initial...
-
Suppose that you could invest in the same projects as in the previous problem but have only $25,000 to invest. Which projects would you choose?
-
Determine h/(x) forh(x) Using the Math Editor, enter the correct answer below: (2x-2x) 4 = 7x+3 using logarithmic differentiation.
-
Anna's utility function is U= 11.4/20 where I is income. An investment opportunity where there is a 30% change of earnings $200, a 35% change of earnings $500 and a 35% chance of earning $2,000 has...
-
How should I verify a cobb-douglas function f(x, y, z) = x^0.5y^0.4z^0.2 is a quasi-concave function but not concave function when apply the calculus criteria to Hessian matrix and the bordered...
-
The economic value of investing in broadband infrastructure Gabriel Ahlfeldt, Pantelis Koutroumpis, and Tommaso Valletti conducted a study that used the differences in house prices to deduce the...
-
A 1700kg car is traveling at 20m/s. The car in front of him slams on their brakes. By the time the driver notices the other car has stopped he only has 2.5s to stop. What is the change in momentum of...
-
Kauai Tools Inc. is planning to invest in new manufacturing equipment to make a new garden tool. The new garden tool is expected to generate additional annual sales of 20,000 units at $10 each. The...
-
The Pletcher Transportation Company uses a responsibility reporting system to measure the performance of its three investment centers: Planes, Taxis, and Limos. Segment performance is measured using...
-
Give two different explanations of how the economy can suffer from stagflation.
-
Why do you think wages tend to be rigid in the downward direction?
-
Explain in words why rising prices reduce the multiplier effect of an autonomous increase in aggregate demand.
-
Iguana, Incorporated, manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo, which costs $2.00 per foot. Each frame takes approximately 30 minutes to...
-
Why does the government intervene in the economy? Explain two ways the government seeks to direct the economy in a mixed economic system like the United States. How can ordinary citizens influence...
-
What strategies do businesses have in place that promote equal opportunity within the organization? Do most businesses offer career development and training to its employees? If so, why? How do...
Study smarter with the SolutionInn App