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An increase in..........will increase
supply
Select one:
O a. Taxes
O b. Income of consumers
.
Subsidies
O d
d. Number of consumers
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- is it always possible to increase tax revenues by increasing tax rates?(please draw therelevant graph(s))consumers increased consumption by a relatively small amount in 2008 and 2009 because thet believe the tax cuts temporary. true or falseSuppose there is a bill to increase the tax on cigarettes by $1 per pack coupled with an income tax cut of $500. Suppose a person smokes an average of 500 packs of cigarettes per year—and would thus face a tax increase of about $500 per year from the cigarette tax at the person’s current level of consumption. The income tax measure would increase the person’s after-tax income by $500. Would the combined measures be likely to have any effect on the person’s consumption of cigarettes? Why or why not?
- (d) Suppose government spending increases by some amount AGo to become Go+AGo. Show the change in Y and C as a response to this increase in spending.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 leftExplain how the law of diminishing marginal utility helps in deriving the demand curve. Explain how double counting occurs in computing GDP
- Imagine there is a consumption smoother (also known as a PIH consumer) who expectsto live for another 40 years and to work for another 30 years. They just learned thatthey will receive a permanent pay increase from their job of $800. How much extra dothey consume this year? What is their marginal propensity to consume?Assuming the tax cut of $245 billion, what is the total amount of taxes paid bythe families in the $200,000 and over income bracket before the tax cut? Whatis the total amount of taxes paid by families in the $20,000 to $30,000 incomebracket before the tax cut?Consider an economy in which tax collections are always $400 and in which the four components of aggregate demand are as follows: GDP Taxes DI C I G (X - IM) $1,360 $400 $960 $720 $200 $500 $30 1,480 400 1,080 810 200 500 30 1,600 400 1,200 900 200 500 30 1,720 400 1,320 990 200 500 30 1,840 400 1,440 1,080 200 500 30 Find the equilibrium of this economy graphically. What is the marginal propensity to consume? What is the multiplier? What would happen to equilibrium GDP if government purchases were reduced by $60 and the price level remained unchanged?
- Need iv to vii answer only Given: C = 250 + 0.8 Y I = 150G = 300TR = 100NX = 100t =0.25i) Find the equilibrium level of income.ii) Suppose, because of the current COVID 19 situation Ꞓ falls to 50, MPS falls to .05, I falls to 10, G falls to 100 and NX falls to 10. How much TR should the government increase to have the same level of equilibrium income as in part i)?iii) In determining the required change in TR in part ii), which multiplier did you use and why? (Hint: keep in mind the consumption tendency households may have under the COVID 19 situation in selecting the multiplier).iv) Draw a graph to show the appropriate changes between part i) and part ii).v) Give an example related to current Bangladeshi situation where the government may follow a 'Transfer Promoting Policy' instead of a 'Growth Promoting Policy' in determining who gets the transfer payment.vi) Instead of paying transfer (TR) if the government were to increase government spending (G), what type of crowding out…The economy is described by the following functions: C = 120 + 0.8YD Tr = 15 Tx = 5 I = 50 - 5i G = 80 Nx = 10 Q1. Derive the IS curve Q2. Suppose taxes in the economy go up by 5, so the new value for taxes is 10. Derive the new IS curve Q3. Illustrate the change in the (Y; i) coordinatesIf the government wants to expand aggregatedemand, it can _________ government purchases or_________ taxes.a. increase; increaseb. increase; decreasec. decrease; increased. decrease; decrease
