Bundle: Principles of Economics, Loose-leaf Version, 8th + LMS Integrated MindTap Economics, 2 terms (12 months) Printed Access Card
8th Edition
ISBN: 9781337607735
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 36, Problem 6CQQ
To determine
The argument in agreement to taxing consumption.
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Students have asked these similar questions
Which of the following effects results from the change in the interest rate created by an increase in government spending?
a.
the investment accelerator and crowding out
b.
the investment accelerator but not crowding out
c.
crowding out but not the investment accelerator
d.
neither crowding out nor the investment accelerator
A consumption tax that replaces an income tax
a. only taxes a household on the money it spends.
b. ultimately taxes income twice-once when the household pays income tax and once when the household
makes a purchase.
c. discourages saving.
d. would likely result in a lower level of saving than an income tax.
Explain, using appropriate diagrams, how a rise in the household saving rate cancause a fall in GDP, and how a fiscal stimulus might offset this.
Chapter 36 Solutions
Bundle: Principles of Economics, Loose-leaf Version, 8th + LMS Integrated MindTap Economics, 2 terms (12 months) Printed Access Card
Ch. 36.1 - Prob. 1QQCh. 36.2 - Prob. 2QQCh. 36.3 - Prob. 3QQCh. 36.4 - Prob. 4QQCh. 36.5 - Prob. 5QQCh. 36.6 - Prob. 6QQCh. 36 - Prob. 1CQQCh. 36 - Prob. 2CQQCh. 36 - Prob. 3CQQCh. 36 - Prob. 4CQQ
Ch. 36 - Prob. 5CQQCh. 36 - Prob. 6CQQCh. 36 - Prob. 1QRCh. 36 - Prob. 2QRCh. 36 - Prob. 3QRCh. 36 - Prob. 4QRCh. 36 - Prob. 5QRCh. 36 - Prob. 6QRCh. 36 - Prob. 7QRCh. 36 - Prob. 8QRCh. 36 - Prob. 9QRCh. 36 - Prob. 10QRCh. 36 - Prob. 1PACh. 36 - Prob. 2PACh. 36 - Prob. 3PACh. 36 - Prob. 4PACh. 36 - Prob. 5PACh. 36 - Prob. 6PACh. 36 - Prob. 7PACh. 36 - Prob. 8PA
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- Eliminating double-taxation would likely a. raise saving and primarily benefit people with lower incomes. b. reduce saving and primarily benefit people with higher income. c. raise saving but primarily benefit people with higher incomes. d. reduce saving but primarily benefit people with lower incomes.arrow_forwardWhich fiscal policy would make a budget surplus smaller or a budget deficit larger? a. an increase in government purchases of goods and services b. lower government transfers c. lower interest rates d. higher taxesarrow_forward7. Examine whether the following items are built-in stabilizers or discretionary changes. (a)Unemployment benefits (b)Tax cuts (c)An increase in government spending on road work (d)Progressive tax systemarrow_forward
- a. In which instance would "crowding out" likely become a concern? OA balanced budget law prevents the government from taking fiscal action during a recession. O Prior-year budget surpluses allow the government to use saved funds to reduce taxes. O In order to increase spending on infrastructure, the federal government decides to borrow funds. b. One result of "crowding out," due to fiscal action, is difficulty saving income for future purchases. O making economic investments. O purchasing stocks and other financial investments.arrow_forward4. A country’s consumer spending is defined by the following equation:Consumer spending = 365 + 0.75 (Disposable Income)a. Draw a diagram to represent this equation. b. Assuming no government, what will the Marginal Propensity to Save (MPS) in this country.c. What will be Consumer spending if disposable income in this country is 1000? d. If suddenly this country’s wealth increases, how do you think the equation might change.Also show it in a diagram.arrow_forwardWhich of the following is incorrect regarding tax revenues? a.they increase during recessions b.they increase during economic expansions c. they are a revenue source in the government's budget d. they change with changes in the tax ratearrow_forward
- Real government purchases may fall when the price level rises if which of the following is true? Group of answer choices A. Some parts of the government budget are fixed in nominal terms. B. All parts of the government budget are fixed in real terms. C. Governments always buy the same quantity of goods and services regardless of how much they cost. D. Governments prefer more expensive goods to less expensive goods because they create more jobs. Quantitative easing involves which of the following? Group of answer choices A. The use of open-market operations to increase the quantity of reserves held by the commercial banks B. The use of open-market operations to increase the quantity of reserves held by the Fed C. The reduction of reserves held by the commercial banks D. The reduction of the discount rate in order to stimulate lending by commercial banksarrow_forwardDoarrow_forwardPlease answer the following questions:arrow_forward
- Please see attachment Answer neatly Show all your work. Based on the above diagram: 1. Calculate MPC? 2. If Private Investment increases by 100, calculate the new level of NI. 3. If full-employment NI is at 3000, by how much should Government spending change? 4. What is the new NI, If 1/2 of those government expenditures are financed through taxes?arrow_forwardAn example of a fiscal policy designed to increase real GDP is a. a cut in taxes. b. an increase in taxes. c. a decrease in government expenditure. d. None of these answers is correct.arrow_forward52. An example of nondiscretionary fiscal policy would be a. The operation of the welfare state b. A federal jobs program adopted to stimulate consumption c. A tax cut adopted to stimulate consumption d. An interest rate cut implemented to stimulate consumptionarrow_forward
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