Answered: Explain the meaning of comprehensive…

Business

Economics

Explain the meaning of comprehensive income and show how a tax on interest income influence people willingness to save.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter7: Macroeconomic Measurements, Part Ii: Gdp And Real Gdp

Section: Chapter Questions

Problem 7WNG

See similar textbooks

Related questions

Q: Consider the following data for a closed economy: Y = $12 trillion C = $7 trillion |= $2 trillion TR…

A: GDP measures the value of all final goods and services produced in a domestic boundary, in a…

Q: The withdrawal of income from circular flow of income example saving is known as____

A: When households save some proportion of their income then that portion is withdrawal from the…

Q: Show on the graph how each of the following events changes the equilibrium interest rate by shifting…

A: "Since you have asked a question with multiple sub-parts, we will solve first three sub-parts for…

Q: This person earns $1000 of income today and $2000 income next year. Point C represents his…

A: The budget constraint for a two-period consumption is : [Ct+Ct+1/rt+1]=[Yt+Yt+1/rt+1] Ct is the…

Q: An Airline spends the following amounts: Employee Salaries 500,000 New Plane 1,500,000 New Engine to…

A: As economies and societies developed, the study of economics got more complicated. Hence, as a…

Q: Ifthe government collects more in tax revenue than it spends, and households consume more than they…

A: Tax refers to the charge or fee imposed on individuals or firms by the government. Impact of tax:…

Q: he following are the components of aggregate demand EXCEPT, consumption of households. government…

A: Aggregate demand is a negatively sloped curve showing inverse relationship between price and…

Q: The table below depicts the level of gross investment at various interest rates in the economy. Year…

A: A : At the interest rate of 5% , the gross investment will be $ 75000 in year 1

Q: This person earns $1000 of income today and $2000 income next year. Point C represents his…

A: The budget line/constraints for a two-period consumption is given by [Ct+Ct+1/rt+1]=[Yt+Yt+1/rt+1]…

Q: If consumption expenditures are $1800 million, gross investment is $450 million, imports are $350…

A: The output or the real GDP would be the sum of the consumption,investment, government expenditure,…

Q: Scenario 1: Suppose savers either buy bonds or make deposits in savings accounts at banks.…

A: Equilibrium in the loanable funds market occurs at the intersection of demand and supply of loanable…

Q: What is national saving? What is privet saving ?what is public saving? How are these three variables…

A: National savings is given by the equation = National Income - Consumption - Government expenditure.…

Q: Capital expenditures may not be deducted from gross income. O True O False

A: Capital expenditures are another term for the investment undertaken by firms to acquire capital…

Q: Explain the difference between saving and investment as defined by a macroeconomist. Which of the…

A: The difference between saving and investment as defined by a macroeconomics is- Investment Saving…

Q: (a) Suppose real GDP per person falls during a devastating recession, which in turn causes…

A: GDP: The gross domestic product, or GDP, is a measurement of the total value of all products and…

Q: Tolga has no income in period 1 (consumption now) and an income of 1300Ł in period 2 (consumption…

A: Given Tolga has no income in period 1. Income of 1300L in period 2. Interest rate = 30% = 0.3.

Q: Consider an economy in which GDP is $30 billion. Tax revenue is $7 billion, consumption is $15…

A: 1. Government budget = Tax revenue – spending 2 Billion = 7 – spending Spending = 5 Billion $

Q: Scenario 1: Suppose savers either buy bonds or make deposits in savings accounts at banks.…

A: A loan fee is how much interest due per period, as an extent of the sum loaned, stored, or acquired.

Q: Please explain in three well-structured paragraphs the impact of a change in the savings rate on the…

A: Saving is the process of setting aside a portion of current income for future use, or the flow of…

Q: The table sets out the data for an economy when the government's budget is balanced. Calculate the…

A: Equilibrium real interest rate is at a point where loanable funds demanded is equal to supplied. At…

Q: If the marginal propensity to save is 0.25, and the government increases its purchases of goods and…

A: The economics as a study is based upon the idea that the resources which are present with the…

Q: a borrower cannot become a saver if the rate of interest decreases, but might become a saver if the…

A: When interest rates fall, he will earn less on his savings, while if he remains a borrower, he will…

Q: explain how income tax affects (i) household savings (ii) business investment

A: A tax placed on people or organisations in relation to their income or profits is known as an income…

Q: If net personal taxes rise, what happens to private saving ? Public saving ?

A: In an economy, taxes refers to the expenditure by the people and revenue of the government because…

Q: Please explain the impact of a change in the savings rate on the output

A: - In an economy, the individuals or groups either save or consume from their income. Savings and…

Q: The importance of income in determining savings has persisted since the time of Keynes. Why have…

A: Keynes: It refers to the economic theory under which economy's total spending and its effect are…

Q: 2,000. C- 1,000 + 2/3(Y- T). 1-1,200-100r. n this economy, compute private saving, public saving,…

A: The term (Y – T – C) is disposable income minus consumption, which is private savings. If government…

Q: n the standard loanable funds market graph, … …an increase in the supply of loanable funds…

A: When the supply curve shift to the right, then it reflects that the savings have increased at each…

Q: If the actual level of income is 18, what would be the resulting unplanned inventory investment? a)…

A: The Keynesian cross diagram is used to determine the equilibrium level of income or real gross…

Q: Suppose the government borrows $20 billion more next year than this year. a. Use a supply-and-demand…

A: a) The given policy, borrowing of $billion more in the next year will cause a decrement in the…

Q: If Congress instituted an investment tax credit, the interest rate would Select one: a.rise and…

A: a. rise and saving would rise

Q: Consider an economy described by the following equations: Y=C + I +G Y=7,000 G=4000 T=2,000…

A: given data Y=7000 G=4000 T=2000 C=150+0.75(Y-T) I=1000-50r now G is rising by 1000.

Q: real interest rate

A: The real interest rate depicts that interest rate which is adjusted to inflation rate, it does not…

Q: Explain which of the graphs below best explains how private investment changes if wealth goes up.…

A: In the loanable funds market, firms and households enter to exchange capita and money for investment…

Q: Suppose the government borrows $50 billion more next year than this year, a, Use a supply-and-demand…

A: Meaning of Government Debt: The term government debt refers to the situation under which the…

Question

Explain the meaning of comprehensive income and show how a tax on interest income influence people willingness to save.

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

Write an essay discussing the determinants of national income, consumption, saving and investments, modelling the economy and the government sector
1. Calculate private household savings. Show your work. 2. Calculate net investment. Did the capital stock for this economy increase, decrease, or not change for the year?
What is national saving? What is privet saving ?what is public saving? How are these three variables related?
Harper is a short-lived human who only lives for two years: current year and next year. In the current year, Harper has an income of $189 and has to pay $36 in taxes. Harper expects that he can receive an income of $132 and has to pay $27 in taxes next year before he dies. The real interest rate between current and next year is 7%. What is Harper's lifetime wealth (in $)? Round your answer to at least 2 decimal places
Define the term Net Income?
If net personal taxes rise, what happens to private saving ? Public saving ?
In the graph you've just made, how does a tax on interest income influence the real interest rate and investment? A tax on interest income _______ loanable funds, which _______ the real interest rate and _______ investment. A. decreases the demand for; raises; decreases B. decreases the supply of; raises; decreases C. increases the supply of; lowers; increases D. increases the demand for; lowers; increases Screenshot attached thanks
explain the impact of a low interest rate on gross domestic product(not less than a page)
Please help with the following economic question : Explain the relationship between Investment spending and the interest rate.
Suppose the government borrows $20 million more next year than this year. What happens to investment? To private savings? To public savings? To national savings? How does the elasticity of the supply of loanable funds affect the size of these changes? How does the elasticity of the demand of loanable funds affect the size of these changes?
Explain THREE (3) factors that can influence investment in an economy.
What is the effect of a rise in the income tax on interest income? A rise in the income tax on interest income ______. A. increases the before-tax interest rate paid by borrowers and decreases borrowing and investment B. increases the after-tax interest rate received by lenders and increases saving C. decreases the before-tax interest rate paid by borrowers and increases borrowing and investment D. decreases the after-tax interest rate received by lenders and increases lendin