Consider an economy in which the only taxes collected by the government are lump-sum (the tax bills of individuals are independent of their actions). If the government increases its tax revenue, then, given GDP remains unchanged, the disposable incomes of households will:

Consider an economy in which the only taxes collected by the government are lump-sum (the tax bills of individuals are independent of their actions). If the government increases its tax revenue, then, given GDP remains unchanged, the disposable incomes of households will:

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter18: Debates In Macroeconomics Over The Rolse And Effects Of Government

Section18.10: Demand-side And Supply-side Views Of The Economy And Government Tools For Changing Real Gdp

Problem 1ST

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Question

Consider an economy in which the only taxes collected by the government are lump-sum (the tax bills of individuals are
independent of their actions). If the government increases its tax revenue, then, given GDP remains unchanged, the
disposable incomes of households will:
Decrease.
Increase.
Remain unchanged.
None of the above.

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