Economics 12. If the tax multiplier is -6 and taxes are reduced by $100 billion, output:(A) falls by $100 billion. (B) falls by $600 billion. (C) increases by $600 billion.(D) increases by $100 billion.

1. Identify the Tax Multiplier:You are given that the tax multiplier is -6. Remember, a negative tax…

Answered: 12. If the tax multiplier is -6 and…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Six Debates Over Macroeconomic Policy

Section: Chapter Questions

Problem 6CQQ

See similar textbooks

Similar questions

14. If the tax multiplier is -6 and taxes are reduced by $100 billion, output:(A) falls by $100 billion. (B) falls by $600 billion. (C) increases by $600 billion.(D) increases by $100 billion.
11. Taxes are reduced by $50 billion and income increases by $1,000 billion. The value of the tax multiplier is: (A)-4. (B) -20. (C) -10. (D) -5.
Suppose that the economy is in a recession as a result of a fall in investment spending and real GDP is below potential GDP. (a) Illustrate this on an aggregate demand in ation diagram. (b) When real GDP falls, what happens to tax revenue, government spending, and the budget balance? (c) If a balanced budget amendment were in place, what would have to happen to government spending and/or taxes? Illustrate on the diagram. (d) Is it wise to allow the government to run a de cit during a recession and a surplus during an expansion?
12
4. Which two ministries use up more of the provincial budget than all the others combined?
5. A reduction in current taxes must result in which of the following? lower future taxes higher government spending in the future some combination of lower government spending and higher future taxes only (a) and (c) are true
Eliminating double-taxation would likely a. raise saving and primarily benefit people with lower incomes. b. reduce saving and primarily benefit people with higher income. c. raise saving but primarily benefit people with higher incomes. d. reduce saving but primarily benefit people with lower incomes.
1. Which branch of the federal government must approve a budget? executive state governments legislative O judicial
4. What have been the various approaches advocated to reform budgeting processes at the state and local levels? 5. What are the five key areas of future state and local budget needs? Which one do you think is the most critical and why? Explain.
A proportional tax is a tax for which people with lower incomes Group of answer choices A. pay a higher percentage of their incomes in tax than do people with higher incomes. B. pay a lower percentage of their incomes in tax than do people with higher incomes. C. pay the same percentage of their incomes in tax as do people with higher incomes. D. pay the same amount of taxes as people with higher incomes pay.
Question 20 In which case will the government collect more tax revenue if tax revenue is tax rate multiplies income? 4% tax rate and $80,000 average income 90% tax rate and $15,000 average income 30% tax rate and $40,000 average income O 15% tax rate and $95,000 average income
5. Let C-120+0.6Y.-140, G-200, T-100. (a) What are government spending multiplier, tax multiplier, and balanced-budget multiplier? (b) What are the output, consumption, saving, and budget deficit at the equilibrium?

SEE MORE QUESTIONS

Recommended textbooks for you

Brief Principles of Macroeconomics (MindTap Cours…

Economics

ISBN:

9781337091985

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Macroeconomics (MindTap Course List)

Economics

ISBN:

9781285165912

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Brief Principles of Macroeconomics (MindTap Cours…

Economics

ISBN:

9781337091985

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Macroeconomics (MindTap Course List)

Economics

ISBN:

9781285165912

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Macroeconomics (MindTap Course List)

Economics

ISBN:

9781305971509

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics, 7th Edition (MindTap Cou…

Economics

ISBN:

9781285165875

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics 2e

Economics

ISBN:

9781947172364

Author:

Steven A. Greenlaw; David Shapiro

Publisher:

OpenStax

SEE MORE TEXTBOOKS

12. If the tax multiplier is -6 and taxes are reduced by $100 billion, output: (A) falls by $100 billion. (B) falls by $600 billion. (C) increases by $600 billion. (D) increases by $100 billion.