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Suppose that the level of income is $1000 and the tax rate is 0.1 %. Given this data, what is the level of disposable income?

Suppose that the level of income is $1000 and the tax rate is 0.1 %. Given this data, what is the level of disposable income?

ENGR.ECONOMIC ANALYSIS
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. Suppose that the level of income is $1000 and the tax rate is 0.1 %.

Given this data, what is the level of disposable income?

 

Use the following information to answer questions 5 through 8:

Consider the following information for Slovenia.

Category

Amount

Autonomous Consumption

430

MPC

0.9

Tax Rate

0.25

Investment

800

Government Expenditure

100

Exports

20

MPI

0.05

 

  1. What is the equilibrium level of GDP in the income-expenditure model?

 

  1. Suppose that there is a decrease in Exports by $20. What is the new equilibrium level of GDP in the income-expenditure model?

 

  1. What is the difference between the original and new GDP as a result of a decrease in Exports?

 

  1. Suppose that MPC is equal to 0.8. What is the spending multiplier?

 

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