Macroeconomics (MindTap Course List)
10th Edition
ISBN: 9781285859477
Author: William Boyes, Michael Melvin
Publisher: Cengage Learning
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Question
Chapter 4, Problem 7E
To determine
The effect of increase in taxes on the household sector.
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A change in which of the following variables will have NO direct effect on domestic demand?domestic incomegovernment spendingtaxesthe interest rate (r)none of the above
Using the following equation calculate the equilibrium income
C=100 + 0.5Y
G=500
I=600
Export=60
Imports =75
If the government got rid of sales tax, how might this affect the market?
shift AD to the right
shift SRAS to the right
shift AD to the left
shift SRAS to the left
Chapter 4 Solutions
Macroeconomics (MindTap Course List)
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- Explain the relationship between MPL and MCarrow_forwardIndividual Retirement Accounts (IRAS) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Shift the appropriate curve(s) on the following graph to show how a decrease in the maximum contribution, from $5,000 to $3,000 per year, would affect the market for loanable funds. INTEREST RATE (Percent) pemand Supply QTY OF LOANABLE FUNDS (Billions of dollars) This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to and the level of investment spending toarrow_forwardCalculate total GDP for this economy given the following components of demand. Round your answer to the nearest tenth and enter the value in trillions of dollars. Components of GDP on the Demand Side (in trillions of dollars) Consumption Investment Government spending Exports Imports Provide your answer below: trillion Total GDP 12.9 3.8 4.2 3.0 4.2 ?arrow_forward
- Aggregate demand is an economic measurement of the total amount of demand for all finished goods and services produced in an economy. Aggregate demand is expressed as the total amount of money exchanged for those goods and services at a specific price level and point in time. Discuss how the four components of aggregate demand affect income?arrow_forward3. Supply and demand for loanable funds The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. Supply Demand 100 200 300 400 500 LOANABLE FUNDS (Billions of dollars) A INTEREST RATE (Percent) m 0 0 600arrow_forwardC = 450 + 0.4Y I = 350 G = 150 X = 70 Z = 35 + 0.1Y T = 0.15Y Yf = 1550 Q.2.3 Calculate the equilibrium level of incomearrow_forward
- QUESTION 17A change in which of the following variables will have NO direct effect on domestic demand? domestic income government spending taxes the interest rate (r) none of the abovearrow_forwardWhat are variables that affect AS (also considered the Supply side of GDP)?arrow_forwardCalculate the equilibrium level of income if C=R100 million + 0.8y and T = R125 millionarrow_forward
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