Alien AdvisorOur economists have redone theircalculations. They now estimate that citizensin our country have an MPC of 0.80. We canfix the problem by decreasing GDP by 850.How much should we increase taxes?

Given,MPC = 0.80 and,GDP needs to be decreased by $850Here,Multiplier = [1/(1-MPC)] = [1/(1-0.80)] =…

Answered: Alien Advisor Our economists have…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter24: Fiscal Policy

Section: Chapter Questions

Problem 12P

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learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com Bb https://.. a SD Bb Bb Bb 1. From the time of George Washington's presidency to the present, the percentage of the average American's income that goes to pay taxes A. has decreased from about 20 percent to about 10 percent. has decreased from about 50 percent to about 25 percent. C. has remained constant at about 10 percent. D. has risen from less than 2 percent to above 45 percent. Е. В. has risen from less than 5 percent to above 25 percent. 2. According to the textbook, which of the following statements is (are) correct for the United States? (x) The individual income tax and the payroll tax are the two largest sources of revenue for the U.S. federal government. (y) Corporate income taxes and excise taxes make up more than 30 percent of the tax revenue for the U.S. federal government. (z) In general, the two most important taxes for state and local governments in the U.S are sales taxes and property taxes. А. (x), (y)…
Most tax payments increase as GDP increases. O True O False
What is the difference between indirect taxes and net indirect taxes? Macro economics
Calculate the average and marginal tax rates inthe following table, and indicate whether the taxis progressive, proportional, or regressive. Whatobservation can you make concerning the relationshipbetween marginal and average tax rates?
What are the three injection into the income-expenditure flow? O Government Spending, Consumer Spending. Exports O Goverment Spending. Investment, Exports : O Government Spending, Investment, Imports
The President of Westeros hires you as an economic consultant. He is concerned that theoutput level in Westeros is too high and that this will cause prices to rise. He feels that it isnecessary to reduce output by $10 billion. He tells you that the MPC in Westeros is 0.6.Which of the following would be the best advice to give to the Westeros president?A) reduce government purchases by $4 billionB) increase taxes by $10 billionC) reduce government purchases by $10 billionD) increase taxes by $2.5 billion
Y S G X-IM 935 -250 320 40 70 2,100 320 140 40 3,220 250 320 200 -150 4,800 375 320 240 -185 5,320 650 320 320 - 340 6,300 825 320 340 -340 Assume taxes are equal to zero. What is the equilibrium level C for the above economy? 4,425 4,800. 5,175. 4,010.
When Amy's income increased her average tax rate decreased trom 20 peroent to 15 percent. When Alice's income increased. her average tax tate increased hom 20 percent to 2 percent When Juke's income incremed, his average tax rate didn't change Ives in an economy witha pgressive ta ystem pays a proportional te and lives in an economy with a regressive ta ystemm OA. Ale Ay Jake 0B Amy Alice Jake OC. Alce, Jake, Amy O D. Jake, Amy Alice
Net taxes are taxes paid minus O A. subsidies O B. consumption expenditure of households O C. capital expenditure D. cash benefits received from governments
Exercise D24 Compare two policies: a tax cut on income or an increase in government spending on roads and bridges. What are both the short-term and longâ€”term impacts of such policies on the economy?
Economist Arthur Laffer famously pointed out that, in some cases, income tax revenue can actually go up when tax rates go down. Why might this be the case?
What are MPC and MPS?

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Alien Advisor Our economists have redone their calculations. They now estimate that citizens in our country have an MPC of 0.80. We can fix the problem by decreasing GDP by 850. How much should we increase taxes?