GDP $ 450 $ 425 $ 2,000 500 450 3,000 600 500 4,000 640 620 5,000 5 680 580 4,800 6 600 620 5,000 The accompanying table gives budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. The public debt declined in year Multiple Choice • 6. . . 5. . 4. • 3. Year 1 2 3 4 LO Government Spending Tax Revenues

GDP $ 450 $ 425 $ 2,000 500 450 3,000 600 500 4,000 640 620 5,000 5 680 580 4,800 6 600 620 5,000 The accompanying table gives budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. The public debt declined in year Multiple Choice • 6. . . 5. . 4. • 3. Year 1 2 3 4 LO Government Spending Tax Revenues

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. George & Martha are married and file a joint income tax return. In 2017 the couple had $ 250,000 of total income and $ 200,000 in taxable income. a. Calculate George & Martha's Washington's 2017 federal income tax liability (USE THE 2017 tax rate schedule in appendix D in your book). b. What is George & Martha's marginal federal tax rate for 2017? c. What is the George & Martha's average tax rate for 2017? d. What is the George & Martha's effective tax rate for 2017?
Question 1 Which of the following accurately describes the phenomenon of crowding out? O government borrowing pushes up interest rates, driving out private investment and consumption O government spending drive up the budget deficit O government spending causes more goods to be allocated to the public sector and fewer are available for the private sector O Increasing the proportion of public sector spending in the composition of GDP renders production less competitive and therefore less efficient.
6. The amount by which federal tax revenues exceed federal government expenditures during a particular year is the A. public debt. OB. budget deficit. O C. Federal Reserve. D. budget surplus.
5. Study Questions and Problems #5 True or False: The marginal tax rate is calculated using additional income, while the average tax rate is calculated using total income. True O False
Government Spending Tax Revenues GDP Year 1 $450 $425 $2,000 Year 2 500 450 3,000 Year 3 600 500 4,000 Year 4 640 620 5,000 Year 5 680 580 4,800 Year 6 600 620 5,000 The accompanying table gives budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. The public debt declined in year
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12. The national debt in the current year is equal to the national debt at the beginning of the year minus the annual budget deficit. a. b. equal to the national debt at the end of the year plus the annual budget deficit. equal to the national debt at the beginning of the year plus the annual budget deficit. C. d. none of the above. H. I
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4. Computing and interpreting average tax rates In a hypothetical economy, Clancy earns $11,000, Eileen earns $22,000, and Hubert earns $33,000 in annual income. The following table shows the annual taxable income and tax liability for these three single individuals. For example, Clancy, who earns $11,000, owes $2,860 in taxes. Use the tax liability figures provided to complete the following table by computing the average tax rate for Clancy, Eileen, and Hubert with an annual income of $11,000, $22,000, and $33,000, respectively. Taxable Income Tax Liability Average Tax Rate Taxable Income (Dollars) (Dollars) (Percent) Clancy 11,000 2,860 Eileen 22,000 3,520 Hubert 33,000 3,630 The income tax system for this country is
The government budget is in DEFICIT when OT G-Transfers (TR) - Interest on the Debt (INT) 0 Government expenditures (G) - Investment expenditures (I) 0