Principles of Microeconomics
7th Edition
ISBN: 9781305156050
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 12, Problem 2PA
Subpart (a):
To determine
Total revenue and its composition.
Subpart (b):
To determine
Total revenue and its composition.
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The information in many of the tables in this chapter can be found in the Economic Report of the President, which appears annually. Using a recent issue of the report at your library or on the Internet, answer the following questions and provide some numbers
to support your answers. (Hint: The website of the Government Printing Office is http://www.gpo.gov.)
Figure 1 shows that government revenue as a per-
centage of total income has increased over time. Is this increase primarily attributable to changes in federal government revenue or in state and local government revenue?
Looking at the combined revenue of the federal government and state and local governments, how has the composition of total revenue changed over time? Are personal income taxes more or
less important? Social insurance taxes? Corporate profits taxes?
9. Make a graph showing the spending and tax revenue
of your state government for as many years as you can
find (use the government of your home country if you
are not from the United States). What trends do you
notice? What spending categories make up the largest
share of the state budget? What are the largest sources
of revenue?
e
Use the information in the table to answer the following question.
Income
Amount of
% of Income
Tax
$25,000
$6,750
25%
$50,000
$10,000
20%
$100,000
$15,000
15%
Which kind of tax does the data in the table represent?
Chapter 12 Solutions
Principles of Microeconomics
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- Assume for the following scenario that there is a 10% sales tax on gasoline. Gasoline Expenditures Total Tax Due Name (Dollars) (Dollars) Determine the amount of money each individual in the following table spends on gasoline taxes and their average tax rate. Total Taxable Income Average Tax Rate (Percent) (Dollars) Tim 10,000 10,000 Brian 40,000 32,000 Crystal 55,000 38,500 Hilary 85,000 51,000 Given the information in the previous table, sales tax on gasoline is because the average tax rate as income rises.arrow_forwardHow would you describe the relationship between corporate taxes and the GDP of a country?arrow_forward4arrow_forward
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