Given the following table: GDP=DIC 291 357 423 102 154.8 207.6 a. Any change in spending will change equilibrium GDP by -4.00 times the change in spending and any nge in the lump-sum tax will change GDP by 5.00 times the change in the tax b. Any change in spending will change equilibrium GDP by 5.00 times the change in spending or the change in the tax c. None of these answers O d. Any change in spending will change equilibrium GDP by 5.00 times the change in spending and any change in the lump-sum tax will change GDP by -4.00 times the change in the tax

Given the following table: GDP=DIC 291 357 423 102 154.8 207.6 a. Any change in spending will change equilibrium GDP by -4.00 times the change in spending and any nge in the lump-sum tax will change GDP by 5.00 times the change in the tax b. Any change in spending will change equilibrium GDP by 5.00 times the change in spending or the change in the tax c. None of these answers O d. Any change in spending will change equilibrium GDP by 5.00 times the change in spending and any change in the lump-sum tax will change GDP by -4.00 times the change in the tax

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2
Refer to the accompanying table for Waxwania. Government Expenditures, G Tax Revenues, T Real GDP $190 100 $500 190 120 600 190 140 700 190 160 800 190 180 900 a. What is the marginal tax rate in Waxwania? ____percent --The average tax rate? _____percent b. Suppose Waxwania is producing $600 of real GDP, whereas the potential real GDP (or full-employment real GDP) is $700.-How large is its budget deficit? $____ -Its cyclically adjusted budget deficit? $____ -Its cyclically adjusted budget deficit as a percentage of potential real GDP?________ percent
uèstion 21 pounts The economy is in a recession. The government enacts a policy to increase the real GDP by $10 billion. The MPS is 0.2. Assuming that the agggregate supply curve is horizontal across the range of GDP being considered, by how much should the government change spending or taxes in order to achieve its objective? Show your calculations. e For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 10pt A v x X, Re v 55 OWORDS POWERED 図田 lili 用
The following is information for the economy of Tandor, where taxes are wholly autonomous: C = 50+ 0.8YD where YD = (Y-T) G = T = 300 XN 104 -0.15Y I = 150 a. The value of equilibrium income is $ b. At equilibrium, the amount of the budget c. If government increased both its spending and taxes by $70, the new equilibrium income would be $ A) $940, budget Balance is 0 and $1130 B) $1040, budget Balance is 0 and $1080 C) $1140, budget Balance is 0 and $1060 D) $1240, budget Balance is 0 and $1380
Equal increases in government purchases and in net taxes have equal but opposite effects on the level of real GDP demanded. a. True b. False
Suppose that the government allocates $1 billion for new roads. It also raises taxes by $1 billion to keep the deficit from growing. The absolute value of the government purchase multiplier is 3.33 and that of the tax multiplier is 2.33. What is the effect on equilibrium GDP? GDP does not change. ● GDP increases by $ 2.33 billion. GDP increases by $3.33 billion ⒸGDP increases by $1 billion.
3
Consider the economy of Citronia, where citizens consume only oranges. Assume that oranges are priced at $1 each. The government has devised the following tax plans: Plan A • Consumption up to 1,000 oranges is taxed at 5%. • Consumption higher than 1,000 oranges is taxed at 50%. . Use the Plan A and Plan B tax schemes to complete the following table by deriving the marginal and average tax rates under each tax plan at the consumption levels of 500 oranges, 1,800 oranges, and 3,000 oranges, respectively. Consumption Level (Quantity of oranges) 88°F Sunny 500 1,800 3,000 F2 @ 2 Marginal Tax Rate (Percent) Complete the following table by indicating whether each plan is a progressive tax system, a proportional tax system, or a regressive tax system. F3 70 Q+ Plan A # 3 F4 Average Tax Rate (Percent) Plan B • Consumption up to 2,000 oranges is taxed at 45%. • Consumption higher than 2,000 oranges is taxed at 15%. $ 4 F5 Plan B Marginal Tax Rate (Percent) % 5 F6 F7 Average Tax Rate (Percent)…
Today the federal government collects nearly O $1 billion a year in tax revenues. O $500 billion a year in tax revenues. O $1 trillion a year in tax revenues. O $4 trillion a year in tax revenues.
Consider the country of Sealand. The government wants to raise GDP by $60. It is known that MPS = 0.10. Which of the following could help the government achieve its objective? A. Reduce taxes collected by $6. B. need more information. OC. An increase in government expenditure by $12. D. All of the other answers are incorrect OE. An increase in government expenditure by $6.
Which of the following is true?
To fully understand the progressivity of government policies, one should only look at the proportion of total income that individuals pay in taxes each year. a. True Ob. False