09 Grades MAVZone MAVzone Login profile New Tab Yousician Welcome to Color... f 7. Graphical treatment...

Transcribed Image Text:

09 Grades MAVZone MAVzone Login profile New Tab Yousician Welcome to Color... f 7. Graphical treatment of taxes and fiscal policy The main difference between variable taxes and fixed taxes is that unlike variable taxes, fixed taxes The following graph shows the consumption schedule for an economy with a given level of taxes. Suppose the government implements a reduction in a variable tax. Use two green points (triangle symbol) to connect the two black points (plus symbols) representing the consumption schedule after the change in taxes. Hint: The new consumption schedule must pass through one point on the left and one point on the right. 50 40 + + + + 20 40 40 REAL GDP (Bilions of dollars) 80 + 300 W A Consumption with Reduction in a Variable Tax + Consumption with Reduction in a Fixed Tax NNNN! The blue line on the next graph represents the original total expenditure line for this economy before the change in tax structure. X (?) Table of Pr 09 REAL EXPENDITURE (Billio 00 40 1 30 20 0 10 30 40 50 60 70 REAL GDP (Billions of dollars) 50 10 avprint Grades MAVzone 0 20 True 80 False MAVZone Login profile New Tab 90 100 Suppose that the government also considered a fixed tax cut and that the resulting consumption schedule would have also passed through one black point (plus symbols) on the left and one black point on the right on the first graph (though not necessarily the same points as the consumption schedule resulting from the reduction in a variable tax). Copyright Notices On the first graph, use two purple points (diamond symbol) to connect the two black points (plus symbols) representing the consumption schedule that would result from a reduction in a fixed tax. (Hint: As before, the consumption schedule must pass through one point on the left and one point on the right.) True or False: The change in equilibrium output is greater when the government implements the fixed tax cut. O On the second graph, use the purple points (diamond symbols) to draw the total expenditure line that would result from a reduction in a fixed tax indicated on the top graph. TE with reduction in a fixed tax Terms of Use Privacy Notice W XI Yousician Security Notice O 0953838068855_0AAA6B970 Welcome to Color... A 43 Grade It Now Accessibility Save & Continue Continue without saving PA 09 Grades MAVZone MAVzone Login profile New Tab Yousician Welcome to Color... f 7. Graphical treatment of taxes and fiscal policy The main difference between variable taxes and fixed taxes is that unlike variable taxes, fixed taxes The following graph shows the consumption schedule for an economy with a given level of taxes. Suppose the government implements a reduction in a variable tax. Use two green points (triangle symbol) to connect the two black points (plus symbols) representing the consumption schedule after the change in taxes. Hint: The new consumption schedule must pass through one point on the left and one point on the right. 50 40 + + + + 20 40 40 REAL GDP (Bilions of dollars) 80 + 300 W A Consumption with Reduction in a Variable Tax + Consumption with Reduction in a Fixed Tax NNNN! The blue line on the next graph represents the original total expenditure line for this economy before the change in tax structure. X (?) Table of Pr 09 REAL EXPENDITURE (Billio 00 40 1 30 20 0 10 30 40 50 60 70 REAL GDP (Billions of dollars) 50 10 avprint Grades MAVzone 0 20 True 80 False MAVZone Login profile New Tab 90 100 Suppose that the government also considered a fixed tax cut and that the resulting consumption schedule would have also passed through one black point (plus symbols) on the left and one black point on the right on the first graph (though not necessarily the same points as the consumption schedule resulting from the reduction in a variable tax). Copyright Notices On the first graph, use two purple points (diamond symbol) to connect the two black points (plus symbols) representing the consumption schedule that would result from a reduction in a fixed tax. (Hint: As before, the consumption schedule must pass through one point on the left and one point on the right.) True or False: The change in equilibrium output is greater when the government implements the fixed tax cut. O On the second graph, use the purple points (diamond symbols) to draw the total expenditure line that would result from a reduction in a fixed tax indicated on the top graph. TE with reduction in a fixed tax Terms of Use Privacy Notice W XI Yousician Security Notice O 0953838068855_0AAA6B970 Welcome to Color... A 43 Grade It Now Accessibility Save & Continue Continue without saving PA