A reduction in current taxes must result in which of the following? lower future taxes higher government spending in the future some combination of lower government spending and higher future taxes only (a) and (c) are true

A reduction in current taxes must result in which of the following? lower future taxes higher government spending in the future some combination of lower government spending and higher future taxes only (a) and (c) are true

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter16: Public Goods And Public Choice

Section: Chapter Questions

Problem 3.7P

See similar textbooks

Related questions

Q: it borrows money from the public by issuing bonds. interest payments on the existing debt increase.…

Q: Discuss why external and domestic borrowing shifts the burden from present taxpayers to future…

A: When talking about external borrowing, it is the borrowings of the government from the rest of the…

Q: 5. Refer to the table. The changes in the budget conditions between 1998 1999 best reflect: * Actual…

A: Fiscal policy refers to the policy of tax and expenditure of government. Expansionary fiscal policy…

Q: 12. Suppose that, in January, the interest rate is 5 percent and firms borrow $50 billion per month…

A: Crowding-out effect:- The crowding out effect occurs when higher interest rates cause a decrease in…

Q: 2. When the government runs a fiscal deficit, it finances it by: a. issuing stocks…

A: When a government's income falls short of its expenditures, a fiscal deficit results.A government…

Q: 1) Under which of the following scenarios would an expansionary fiscal policy be more effective?…

A: In an economy, expansionary fiscal policy refers to the situation when government tries to increase…

Q: Suppose that the MPS = 0.2 and the government is interested in raising the level of output in the…

A: As per the guidelines, we only question one question at a time. Please resubmit the other…

Q: 12. What is the purpose of the following fiscal policies? a. Contractionary b. Expansionary fiscal…

A: In economics and political science, fiscal policy is the use of government revenue collection and…

Q: 2. If a government runs a budget deficit of $10 billion dollars each year for ten years, then a…

A: * ANSWER :- * (2) as based on given data ,

Q: 1.in what way government is able to finance its deficit? 2.explain the reason why budget deficit can…

A: 1. In what way government is able to finance its deficit Fiscal deficits occur when the government…

Q: 7 - In a circular-flow diagram, funds that flow between households and the government are, 62 a)…

A: Circular flow diagram: It is a graphical representation of the flow of goods and services and money…

Q: 1. If inflation is a major issue in the economy, what would be the correct fiscal policy response…

A: Answer: Inflation: it refers to the rise in the general prices of goods and services during a year.…

Q: 4) Why should the federal government not be required to balance its budget while state and local…

A: A budget is a financial plan for an economy. the budget is the plan which is made or drawn for a…

Q: 1. What are the strengths and weaknesses of program planning budgeting?

A: Hi! Thank you for the question As per the honor code, We’ll answer the first question since the…

Q: 14) Suppose real GDP is $12.6 trillion and potential GDP is $12.4 trillion. To move the economy back…

A: The GDP gap also being known as the output gap is the difference between actual GDP and potential…

Q: 4. Ghana has continually seen an increase in its public debt stock from one government to another.…

A: Answer: Introduction: Public debt: Public debt stock refers to the total outstanding debt of the…

Q: 2. What are the budget revenues for a government to finance government spending?

A: The government as an economic agent would result in the income of the government to finance the…

Q: utline the supply-side view of fiscal policy. How does this view differ from the various demand-side…

A: The fiscal policy impact not only affects the demand side but also the supply side. The most…

Q: When an economy is already at full employment, what is the outcome of expansionary fiscal policies…

A: Expansionary fiscal policy refers to increasing the money supply through increasing government…

Q: 1. Refer to Table 1-1. CBO's Baseline Budget Projections, by Category (pg. 7). It is projected that…

A: A government budget is a report that presents an overseeing body's expected incomes and proposed…

Q: 10.We discussed four problems (Problems of Timing, Political Consideration, Offsetting State and…

A: The four problems of fiscal policies are listed as below. Problems of TimingPolitical…

Q: 1. How does the government spend? 2. How does the government tax? 3. What are budg t deficits?

A: Government basically refers to a structure that governs a group of people, and it generally consists…

Q: 7. In what ways is the government debt a potential burden on future generations? What is the…

A: In classical theory, the real interest rate is determined in the loanable funds market. In the…

Q: 1. What is deficit budget? What measures Government can take to bring their budget into surplus?…

A: Government budget makes a forecast of the government's spending and taxes in a future period of…

Q: 1. What is the role of the Council Economic Advisers (CEA) as it relates to the effectiveness of the…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Explain how a larger government budget deficit increase the magnitude of the crowding-out effect?

A: government budget deficit means that government's expenditure is more than the government's revenue…

Q: Suppose the government implements an expansionary fiscal policy to finance e-toll gantries. Required…

Q: 1. Why is a $100 billion increase in government spending on goods and services more expansionary…

A: In an economy, a 1% change in government spending will have different impact on the real GDP as…

Q: Table 24.8 All Figures in Billions of Dollars Comsumption Spending Income) Net Taxes (C=100 + 0.9Yd)…

Q: 6. What fiscal policy actions would you recommend in the following instances? (Draw a diagram that…

A: d. The output gap occurs when the economy's production falls short of its potential. When real GDP…

Q: n increase in federal income tax rates is an example of fiscal policy that affects GDP indirectly…

A: Aggregate demand is the combination of consumption, government expenditure, investment, export and…

Q: 2. Assume a given economy has an equilibrium GDP of $360 billion. A. If government spending and…

A: Given Information: Equilibrium GDP =$ 360billion

Q: 7. The state of Minnegan is considering two alternative methods of funding local road construction,…

A: Introduction: The strategy is a move that directors make to achieve at least one of the…

Question

100%

5. A reduction in current taxes must result in which of the following?

		lower future taxes
		higher government spending in the future
		some combination of lower government spending and higher future taxes
		only (a) and (c) are true

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What are some fiscal policies for improving a societys human capital?
If an individual owns a corporation for which he is the only employee, which different types of federal tax will he have to pay?
When governments run budget deficits, how do they make up the differences between tax revenue and spending?
What are some fiscal policies for improving the technologies that the economy will have to draw upon in the future?
Give some examples of changes in federal spending and taxes by the government that would be fiscal policy and some that would not.
How would a balanced budget amendment affect a decision by Congress to grant a tax cut during a recession?
Why do legislators vote for spending projects in districts that are not their own?