A consumption tax that replaces an income taxa. only taxes a household on the money it spends.b. ultimately taxes income twice-once when the household pays income tax and once when the householdmakes a purchase.c. discourages saving.d. would likely result in a lower level of saving than an income tax.

The characteristics of a consumption tax that replaces an income tax. Let's analyze the options: a.…

Answered: A consumption tax that replaces an…

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter18: Debates In Macroeconomics Over The Rolse And Effects Of Government

Section: Chapter Questions

Problem 1WNG

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"Discuss the Impact of Taxes on Household Savings in the United States"
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.
A consumption tax that replaces an income tax a) only taxes a household on the money it spends. b) discourages saving. c) would likely result in a lower level of saving than an income tax. d) ultimately taxes income twice—once when the household pays income tax and once when the household makes a purchase
Economics
Suppose an individual decreases their consumption in a year, resulting in more saving for and consumption in the next year. In a taxation system that taxes consumption but not interest income, what will happen to this individual's present value ilfetime tax burden? Ot will Increase. It will decrease. OIt will stay the same.
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Public saving is positive when: a. there is a government budget deficit b. after-tax income of households and businesses is greater than consumption expenditures c.there is a government budget surplus d. the government's budget is balanced
Consider an economy where the marginal propensity to save is 0.15; the marginal propensity to import is 0.05 and the marginal propensity to tax is 0.2. If there is an increase in government spending of $150 million, by how much would national income increase? (a) National income would increase by $350 million (b) National income would increase by $375 million (c) National income would increase by $210 million (d) National income would increase by $240 million
Increase in tax by the government: a. None of these b. Decreases the consumption by individuals c. Increases the saving by individuals d. Increases the consumption by individuals
When governments run budget surpluses, what is done with the extra funds?
Only typed answer and please don't use chatgpt Suppose the tax multiplier in an economy is -3. How will total spending (TS) change when taxes (T) increase by $300? Group of answer choices TS will decrease by $900 TS will decrease by $100 TS will increase by $900 TS will increase by $100
What is the effect of a rise in the income tax on interest income? A rise in the income tax on interest income ______. A. increases the before-tax interest rate paid by borrowers and decreases borrowing and investment B. increases the after-tax interest rate received by lenders and increases saving C. decreases the before-tax interest rate paid by borrowers and increases borrowing and investment D. decreases the after-tax interest rate received by lenders and increases lendin

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