Assume the following behavioral equations for a macroeconomy: C = 100 + .9Yd, l = 50, T= $100 and G = $40 from the above behavioral equation tax multiplier is Select one: O a. 1 b. none of the options O c. 10 O d. 9
Q: Miller wants to discourage energy drink purchase, so he's considering a $1 tax or $2 tax on the…
A: The Laffer curve, given by Arthur Laffer, is a supply-side economics' paradigm that illustrates the…
Q: 5. Consider the utility function u(x, y) = 2 In x + 4y. Suppose that initially, p, = 1, py = 2, and…
A: Substitution effect refers to that change in demand arising from a price change which adjusted for…
Q: The demand-function for a given consumer good (A) is given as: Qа 3D 1400 — 4Pа - 2Рв — 0.0051 Where…
A: 2.1) The factors affecting the demand are: a) Tastes and preferences: If the consumers’ tastes…
Q: c. Does the tax-spending system in the United States redistribute resources from higher-income…
A: A progressive tax refers to a tax in which the tax rate increases as the taxable amount rises, thus…
Q: Select one or more: O a. Households smooth their income to match their volatile consumption. O b.…
A: The overall idea is that the family spending relies upon the degree of pay produced during a given…
Q: a)Write down the budget constraint and solve for the demand functions. Given your answer how much…
A: (Only the first three parts have been answered). (a) The representative consumer’s utility…
Q: Which curve shifts and in which direction when the following events occur in the tax accounting…
A: a) Answer:- Demand increases. Explanation:- On tax day, ever more individual are going to look to…
Q: In an economy such that: C = 200 + 0.80 (Y- T) I=40 - 20 R X 30 - 0.05 Y T= 100 M =0.20 Y- 10 R M =…
A: The goods market equilibrium is indicated at a point where real GDP is equal to aggregate…
Q: The formula for the tax multiplier is Select one: O a. -MPC/(MPC + 1). O b. MPC/ (1 MPC). O c. 1/(1-…
A: Tax multiplier assumes that a change in tax would affect the consumption, keeping everything else…
Q: 6. Consider an economy with a straight line PPF. Show how an increase in government spending paid…
A: A straight line PPF shows constant opportunity cost between two goods in the PPF, Where there is no…
Q: Solve for equilibrium where: • NT = tY = 0.15Y • C = Co + cYD = 20 +0.8YD o lo = 100 o Go = 100…
A: Firm's objective is to maximize the profit and produce where marginal revenue and marginal cost are…
Q: Most federal government spending is considered to be O Based on trust funds. O Unneccessary. O…
A: Introduction. federal government is the U.S constitution.
Q: Q3: Consider the national income model: Y = C + I0 + G0 + (X0 − M)............. (1) C = a + byd,…
A: Hello. Since you have posted multiple parts of the question and not specified which part of the…
Q: A reduction in the tax rate might lead to an increase in the growth rate of potential output if... O…
A: Generally a reduction in tax rate is considered the fiscal expansionary role of central government…
Q: Now we lOok at the role taxes play in Ose.we ha economy of the type in Sections 10-4 and 10-5,…
A: In a closed economy, the equilibrium level of income is attained at Y = Aggregate demand Where, AD…
Q: The figure given below depicts the macroeconomic equilibrium in a country. Figure 11.3 AS, 400+ 200+…
A: Aggregate demand is a macroeconomic concept and can be defined as the sum total of the final value…
Q: Which of the following would be classed as an expansionary fiscal policy? O A. An increase in the…
A: Fiscal policy is the one used by the government. The instruments used by the government in a fiscal…
Q: The demand-function for a given consumer good (A) is given as: QA = 1400 – 4PA – 2PR – 0.0051 - - -…
A: The examples of three factors that influence demand : Change in tastes for the product - When…
Q: can you answer this please
A: Tax revenue is positively related with the GDP. When the GDP is increases, then the tax revenue…
Q: Say, the expenditure multiplier for an economy is 2. An increase in government spending by $300…
A: here we calculate how much economy boost due to government expenditure , so the calculation of the…
Q: Mhe marginal propensity to consume is 0.8, the marginal tax rate is 0.2, and the marginal propensity…
A: In the Keynesian macroeconomics model, the equilibrium level of output in the goods market is…
Q: Question 6 If a lump-sum income tax of $35 billion is levied and the MPS is 0.40, the consumption…
A: Consumption schedule shows positive relationship between consumption spending and disposable income.…
Q: The formula for the tax multiplier is Select one: O a. -MPC/(MPC+ 1). O b. MPC/ (1 + MPC). O c.…
A: Tax multiplier refers to the amount of tax multiplied or increased out of the fiscal policy…
Q: Voters elect a new government, which has promised to increase its services to the public without…
A: An IS curve illustrates the points of interest rate and output at which the investment is equal to…
Q: 5. Suppose Bard is its own marginal propensity to consume at Bard is 0.5. Autonomous consumption at…
A: Answer to the question is as follows:
Q: Which of the following is an example of fiscal policy? O a Controlling money supply. O b. More than…
A: The use of government spending and tax policies to impact economic conditions, particularly…
Q: If the government cut expenditures during an expansion O A. it would have to raise the tax rate O B.…
A: Expansion in economics means the increase in production and employment. Because of this, the income…
Q: c) Now suppose that instead of using a sales tax the mayor decides to use an income tax of 5% or…
A: (c): The Mayor imposes income tax of 5% i.e. T = $100 per person. Thus new budget (BC) constraint…
Q: Identify whether each of the following taxes is progressive or regressive and indicate in each case…
A: 1. The Federal Personal Income tax is” progressive, and the incident is on the taxpayer” As income…
Q: A given change in taxes shifts the aggregate demand curve by than an equal change in government…
A: We know that the Government Spending Multiplier = 11- MPC and the Tax Multiplier = MPC1 - MPC
Q: 1. For what kind of preferences will the consumer be just as well off facing a quantity tax as an…
A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: (a) The behavioral equation for consumption now includes the interest rate. Give an economic reason…
A: The IS-LM model establishes a relation between interest (r) rate and national (Y) income for which…
Q: During a boom, govemments tend to nun budget surpluses. What effect will these surpluses have on the…
A: National saving is the sum of public savings and private savings. Private saving = Y - C - T and…
Q: 1. Given the following model: Y = C + lo + Go C = a+ b(Y - T) T = d+ tY (0) How many endogenous…
A: Given model :- Y = C + I0 + G0 C = a + b(Y - T) T = d + tY
Q: 17 of 25 If the federal government increases govemment spending to increase aggregate demand and…
A: Sometimes higher government spending lowers consumption spending and investment spending.
Q: The economy of Kiwiland can be characterized by Equation below C=1,000+ 0.5Yd T=200 G=400 I=500…
A: The information which has been given to us is as follows:-C= 1000+0.5D T=200 G=400 I=500
Q: Given a three-sector income determination model in which Y4 = Y –T T=To + tY Determine the magnitude…
A: A multiplier is a phrase used in economics to describe an economic element that influences changes…
Q: The permanent income hypothesis and the Ricardian equivalence theorem Select one: O a. are the same…
A: Ricardian proportionality is a monetary hypothesis that says that funding government spending out of…
Q: Assume two normal and ordinary goods A and B. If the good A is taxed and its compensated demand is…
A: Tax refers to the compulsory contributions that the government of a place collects from individuals…
Q: In the circular flow of income and expenditure model... O A. the level of Income for factors of…
A: The circular flow of income model shows how income flows in the economy.
Q: Question 7 If the MPC in the economy is 0.75, govemment could shift the aggregate demand curve…
A: 7. Here, it is given that the MPC is 0.75. the value of MPC can be used to compute the spending…
Q: Consider a closed economy with consumption, production, and government. The representative consumer…
A: since you have asked multiple questions and according to policy we can solve only 1 question and for…
Q: a) Solve for equilibrium output in terms of the exogenous variables. b) What is the multiplier? Is…
A: Given, Z= C+ I + G ; C = c0 + c1YD ; T = t0 + c0 + c1Y ; YD = Y - T a. At equilibrium, Y= Z; Y…
Q: If people expected that a fiscal policy in the form of a tax cut was temporary, then this policy's…
A: This policy would be weaker because it would be temporary.
Q: Suppose the following economy of Ravkan. C = Co + 0.6(Y – T) |= lo G = Go X = X0 M = M, + 0.1Y What…
A: Macroeconomics analyzes the economy as a whole. It studies aggregate economic concepts such as…
Q: Which of the following will shifts the SAS curve to the left? O A natural disaster. O An improvement…
A: The short-run aggregate supply curve is the curve that provides information about the total amount…
Q: sinple mae model where the marginal propersity to consume out f dposable income is A, the net tax…
A: It is given that:
Assume the following behavioral equations for a macroeconomy: C = 100 + .9Yd, l = 50, T= $100 and G = $40 from the above behavioral equation tax multiplier is
Select one:
O a. 1
b. none of the options
O c. 10
O d. 9
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- Tax Revenue ($) 50 NE 40 30 20 10 0 20 40 60 According to this Laffer curve, should the government increase the tax rate from 4C 80 Tax Rate (%) 100 O a.) Yes, because the tax revenue continues to increase after a tax rate of 4C b.) No, because the government should increase the tax rate to 100%. c) No, because the tax revenue is no longer maximized. NVIDIA G SYNE d.) Yes, because the government will receive a higher tax revenue. OEconomics Below is a tax table. Assume I earn $150 a year. My tax bracket is my marginal tax rate is I pay in taxes. my average tax rate is ; and O to $100 is 10% $101 to $200 is 15% $201 to $300 is 20% O 10%; 15%; 13.5%; $17.50 O 15%; 15%; 11.7%; $17.50 O none of these O 15%; 15%; 12.5%; $13.502. Consider a society with only two people one rich and one poor-who have the same util- ity functions. These utility functions exhibit diminishing marginal utility. Suppose that taxes are set such that the total amount of utility that each person loses is the same. Does it follow that the tax will be progressive? Explain.
- Givens: mar T1 2 0, x2 > 0 s.t. 8* + 4* T2 <1600 • The marginal utility of good 1: MU = 25 • The marginal utility of good 2: MU, = .75 * Equation Description: A consumer is attempting to maximize utility subject to a budget constraint. Utility equals the product of two terms: the first term is units of good 1 raised to the .25 power; and, the second term is units of good 2 raised to the .75 power. The price per unit of good 1 is $8; the price per unit of good 2 is $4: and, consumer income is $1600. Marginal utility of good 1 equals the product of three terms: the first term is .25; the second term is units of good 2 raised to the !75 power; the third term is units of good 1 raised to the -75 power. Marginal utility of good 2 equals the product of three terms: the first term is .75: the second term is units of good 1 raised to the .25 power; the third term is units of good 2 raised to the -.25 power. Question: What is the highest level of utility the consumer can achieve? O 150 utils O…A buyer values a house at $525,000 and a seller values the same house at $485,000. If sales tax is 8% and is lessed on the buyer, then, what would be the highest price that the buyer would be willing to pay? O$525,000 Ob $523,800 O$485.000 d $456,111Kathy works full time during the day as an economist and faces a 90 percent marginal tax rate. If Kathy were to get an offer to work a second job in the evenings doing consulting work for a local business for $10,000 per year, how much of this additional income would she be able to keep as net pay after taxes? O $1,000 O $4,000 O $6,000 O $10,000
- Butget Constraint Slope 2/1 GoodF The graph above shows budget constraints comparing an income- in-kind assistance for Good F and direct cash assistance of identical dollar value. How much is the dollar value of the income-in-kind assistance? O a. $10 O b. $20 O c. $70 $80 determined from the graph1. Given the following model: Y = C + lo + Go C=a+b(Y= T)ou(a>0, 0Suppose that your state raises its sales taxfrom 5 percent to 6 percent. The state revenuecommissioner forecasts a 20 percent increase insales tax revenue. Is this plausible? Explain.You are in charge of forecasting revenue for the government. Assume the government is going to increase the tax rate. What type of taxpayer is likely to respond to this tax rate increase by working more? If applicable, what is the name of this effect? O A taxpayer with less disposable income; Substitution Effect O A taxpayer with less disposable income; Substitution Effect A taxpayer with more disposable income; Substitution Effect O A taxpayer with more disposable income; Income Effect O A taxpayer with less disposable income; Income Effect4 l 51% a 12:02 O Worksheet (25%) Suppose that the governrnent irmposes a tax oni cigarettes. Use the diagram below to answer the questions D is the demand curve before tax S is the supply curve before tax and S is the supply curve after the tax. Price 18 12 10 10 12 Qua (a) For the market for cigarettes without the tax indicate: () Price paid by consumers (1i) Price paid by producers () Quantity of cigarettes sold (iv) Buyer's reservation priceducer surplu... Practice midterm questions Review 10 9 8 7 PLEASE IGNORE Consider the supply and demand diagram corresponding with this question. Suppose that a per unit tax of $4 is placed on the good in question. At the new equilibrium, how much total tax revenue does the government collect? Price 6 5 SD3 Review 4 3 2 1 0 QEcon Mid-Sem... 1 12.0 2 3 4 Type your numeric answer and submit 5 diagram depicti... 6 7 8 9 D S 10 11 G supply a Confusing Quantity 12SEE MORE QUESTIONS