Economics For Today
Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Chapter 21, Problem 9SQ
To determine

The impact of equal increase in the tax rate and the government spending.

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If the government wants to increase real GDP levels, it could  A) decrease government expenditures and increase taxes.    B) increase government expenditures.    C) decrease government expenditures.    D) increase taxes.
Suppose that the government decreases its autonomous spending by $100 billion and also decreases its autonomous taxes by $100 billion. How would this affect the economy? Question 8 options:   No effect on the level of GDP   GDP may rise or fall depending on the size of the mpc   GDP will rise   GDP will fall
Which of the following is not a valid point in debating the merits of increasing government expenditures or cutting taxes during a recession? a. A cut in the marginal tax rate increases the incentives to find a job and work longer hours. b. Consumers will save a portion of a tax cut. c. The government may use the increase in expenditures on projects with little value, particularly, if it wishes to respond quickly. d. There is no evidence that tax cuts have been followed by increases in economic growth.
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