**Instructions:** In the table, enter your answers as a whole number. Round your answers for the MPC and the multiplier to 1 decimal place.What is the value of the MPC?[Input Box]b. Assume now that a lump-sum tax is imposed such that the government collects $10 billion in taxes at all levels of GDP. Add the after-tax consumption to the table below.| GDP, Billions | Consumption, Before Tax, Billions | Lump-Sum Tax, Billions | Consumption, After Tax, Billions ||---------------|----------------------------------|------------------------|---------------------------------|| 100 | 120 | 10 | [Input Box] || 200 | 200 | 10 | [Input Box] || 300 | 280 | 10 | [Input Box] || 400 | 360 | 10 | [Input Box] || 500 | 440 | 10 | [Input Box] || 600 | 520 | 10 | [Input Box] || 700 | 600 | 10 | [Input Box] |Compare the MPC and the multiplier with those of the pretax consumption schedule.MPC after tax = [Input Box] Multiplier after tax = [Input Box]**The MPC and multiplier are:**- [ ] higher before the tax.- [ ] higher after the tax.- [ ] the same before and after the tax.

a) MPC = ∆C/∆Y From the given table, ∆C = 80 ∆Y = 100 Hence MPC (c) = 80/100 = 0.8

Instructions: In the table, enter your answers as a whole number. Round your answers for the MPC and the multiplier to 1 decimal place. What is the value of the MPC? b. Assume now that a lump-sum tax is imposed such that the government collects $10 billion in taxes at all levels of GDP. Add the after-tax consumption to the table below. Consumption, Before Tax, Billions Lump-SumTax, Bilons Consumption, After Тах, Billons GDP, BIllions 100 120 10 200 200 10 300 280 10 400 360 10 500 440 10 600 520 10 700 600 10 Compare the MPC and the multiplier with those of the pretax consumption schedule. MPC after tax= Multiplier after tax = The MPC and multiplier are: O higher before the tax. O higher after the tax. O the same hefore and after the tay

Instructions: In the table, enter your answers as a whole number. Round your answers for the MPC and the multiplier to 1 decimal place. What is the value of the MPC? b. Assume now that a lump-sum tax is imposed such that the government collects $10 billion in taxes at all levels of GDP. Add the after-tax consumption to the table below. Consumption, Before Tax, Billions Lump-SumTax, Bilons Consumption, After Тах, Billons GDP, BIllions 100 120 10 200 200 10 300 280 10 400 360 10 500 440 10 600 520 10 700 600 10 Compare the MPC and the multiplier with those of the pretax consumption schedule. MPC after tax= Multiplier after tax = The MPC and multiplier are: O higher before the tax. O higher after the tax. O the same hefore and after the tay

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Why does a $1 increase in government purchases lead to more than a $1 increase in income and spending? OA. Through the government purchases multiplier, the $1 increase in government spending will lead to a decrease in aggregate demand and national income, which will lead to a decrease in induced spending OB. Through the government purchases multiplier, the $1 increase in government spending will lead to an increase in aggregate demand and national income, which will lead to a decrease in induced spending OC. Through the government purchases multiplier, the $1 increase in government spending will lead to an increase in aggregate demand and national income, which will lead to an increase in induced spending OD. Through the government purchases multiplier, the $1 increase in government spending will lead to a decrease in aggregate demand and national income, which will lead to an increase in induced spending
Suppose the consumption function is C-$700 billion +0.8Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially (before multiplier effects) with Mc raw Instructions: Enter your responses as a whole number. a. a $30 billion increase in government purchases? $ billion b. a $30 billion tax cut? $ c. a $30 billion increase in income transfers? billion $ What will the cumulative AD shift (after multiplier effects) be for d. the increased government spending? $ e. the tax cut? F stly clear billion billion billion f the increased transfers? $[ billion ▬▬▬ Q Search D < Prev W 1 of 5 C
As shown in Exhibit 2, dissaving occurs: Group of answer choices at $5 trillion. between 0 and $4 trillion. where disposable income is greater than $4 trillion. at $8 trillion.
tme ratenet c c) Given the following economie models Y = C+I+G+ X-M C = 1000 +0.2yD- T = 30 +0.4Y I = 100 +0.15Y G = 40 X = 180 %3D M = 200+0.25Y Derive and explain the meaning of the foliowing multipliers - Consumption multiplier ii. i. iii. iv. Tax multiplier Investment multiplier Government multiplier incre
Mexico's real GDP fell from 4.5 trillion pesos to 3.8 trillion pesos over the first part of 2020. In that same time, its consumer spending fell from 3.1 trillion pesos to 2.5 trillion pesos. Assume that real GDP represents disposable income. Using these values, what is the size of the tax cut multiplier? (Round answers to one decimal place.
3
Only typed answer and please don't use chatgpt
Please answer g, and h professor. Thank you
3
Economics You are told that an economy's full-employment level of real output is $800 billion while its equilibrium level is S600 billion and the AD shortfall is $400 billion. You are also told that the mpc is 0.6. If the government wants to eliminate the gap by means of an EQUAL change in Gand T (taxes), It should decrease both G and T by $400 billion. OA Oe increase both G and T by $400 billion. Oc decrease both G and T by $200 billion. OD increase both G and T by $200 billion.
Give typed solution only assume an economy has an MPC of .5 and their full employment level of output is $500 billion. If their current GDP is $600 billion, what could their government do to try ans correct this? a) decrease taxes by $50 billion b) decrease government spending by $50 billion c) increase government spending by $50 billion d) increase taxes by $50 billion
How do income taxes and taxes on consumption expenditure influence the tax wedge? An increase in income taxes _______ the tax wedge, and an increase in taxes on consumption expenditure _______ the tax wedge. A. increases; increases B. increases; does not change C. decreases; decreases D. does not change; increases