Answered: If personal income taxes are increased,…

If personal income taxes are increased, disposable income and consumption increase. stay the same. decrease. change in an unpredictable direction

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: During the 2012 fiscal year, households in an economy spent 80 per cent of their disposable income…

A: Introduction We have given data of a economy of the fiscal year 2012. We have to calculate the…

Q: Consumption function: C = 250 + 0.8Y Investment spending: I = 150 Government spending: G = 500…

A: Autonomous spending is independent of income. Autonomous spending = 250 + 150 + 500 + 200 - 150 =…

Q: In an economy MPC equals to 0.2 if the investment increases by $ 100 billion calculate the increase…

Q: Equilibrium GDP( Y) 5 points Disposable Income (Yo) 5 points 1. 2. Consumption Spending (C) 5 points…

Q: During recessions which type of spending falls?a. consumption and investmentb. investment but not…

A: Recession is a situation of fall in whole economic activity. In other words, Recession is a business…

Q: Exhibit 10-3 Disposable Income Yd Consumption C $2,000 $2,040 2,100 2,120 2,200 2,200 2,300…

A: The multiplier is a measure of the amount by which the equilibrium level of income changes due to a…

Q: Explain the effects of Covid-19 on private consumption since 2020. Show your own projection of…

A: Consumption: It refers to the process under which goods and services are purchased by the people.…

Q: If in an economy MPC is 0.8 and investment increase by $1000 billion. Calculate the increase in…

A: Given MPC = 0.8 Increase in investment = $1000 billion

Q: If in an economy MPC is 0.8 and investment increase by $10 billion. Calculate the increase in…

A: The marginal propencity to consume (MPC) = 0.8 Increase in investment = $10 billion

Q: 1. Given the following table showing the level of aggregate consumer spending and disposable income…

A: Marginal propensity to consume = Change in consumption / change in income = (170-140) / (250-200) =…

Q: If the expenditure multiplier is 2.5 and the government spending increases by $4 billion, what would…

A: Given: Expenditure multiplier = 2.5 Government spending = $4 billion

Q: Question 2 Refer to the data in Table 1, the consumption function is C = 200+ 0.8 (Y-T). Fill in the…

A: "Macro-economic equilibrium output is attained at a point where income equates the planned aggregate…

Q: Increase in tax by the government: a. None of these b. Decreases the consumption by individuals c.…

A: When government increases taxes, the disposable income of the people tends to reduce. In other…

Q: Given that: The government expenditure G = 40, the investment I = 60 the consumption C=(0.75)Ya+10,…

A: National income is equal to the sum of expenditures incurred by various sectors of the economy in…

Q: Given that G= 20 1= 35 C = 0.9Ya + 70 T= 0.2Y + 25 Where, G, I, C, T and Ya are planned government…

A: Aggregate expenditure is the sum of consumption spending, investment spending and government…

Q: Find the value of change in investment if the value of multiplier is 5 and the change in national…

A: The information being given is as follows:- MULTIPLIER = 5 Change in national income = $1000 million…

Q: Consumers of a country spend 83.21% of their disposable income. If the government wants to increase…

A: The tax multiplier would result in the change in the tax which would create a multiplier effect…

Q: Explain, with the aid of an equation, the components of the consumption function.

A: The mathematical expression that indicates the behavior of the households according to which they…

Q: Real GDP Refer to Figure 13-1 above. Ceteris paribus, an increase in personal income taxes would be…

A: The aggregate demand refers to the total demand for all the goods and services produced in an…

Q: If MPC is = 0.6 and government spending decreases by dollar 100 billion, what happens to equilibrium…

A: Marginal proepensity to consume = 0.6 Decrease in spending = $100 billion

Q: If the autonomous expenditure by the government increases by 7000 and the MPC is 0.2 find the level…

Q: Possible levels of Real domestic output, billions employment, millions 45 50 55 60 65 $250 275 300…

A: Aggregate expenditure is the composition of consumption, investment, government spending, and net…

Q: If MPC =.6 and government purchases increases by $5 billion, GDP will increase by $3 billion $30…

A: Increases in the GDP depend on the Multiplier and it depend upon the MPC , so here we calculate the…

Q: Which of the following is correct? The relationship between the MPS and the MPC is such that: Select…

A: Hi! Thank you for the question as per the honour code, we’ll answer the first question since the…

Q: Calculate the GDP under Expenditure approach, if Consumption is 2.9 billion, Investment is 1.3…

A: Gross Domestic Product(GDP) refers to the value of final goods and services produced in an economy…

Q: In an economy, income raise by $5000 to $6000 million as a result of 20% rise in investment…

A: # Investment multiplier is given as the ratio of change in income to the change in investment. That…

Q: An increase in the desire to save leads to a decrease in gross domestic product. True or false

A: Since all are distinct questions, we shall answer the first one only. Please resubmit the other…

Q: In an economy MPC = 0.6 if invesment increases by 600 crore calculate the increase in the income

A: Marginal propensity to consume (MPC) is the ratio of the change in consumption to the change in…

Q: Explain the effect of national income when price is flexible due to the following situation: a) An…

A: In an economy, national income changes due to changes in the components of aggregate demand, when…

Q: a) Calculate the national income equilibrium. b) Based on your answer in (a), show the aggregate…

A: Given Information- Autonomous consumption (Ā) is equal to RM 300 million Marginal propensity…

Q: In an economy S = -60 + 0.2Y and the invesment is 5000 calculate the 1)Equilibrium level of the…

Q: if investment is $0.5 trillion, government spending is $1 trillion, and next exports are -$0.5…

A: Gross domestic product (GDP): - GDP is the market value of all final goods and services produced in…

Q: J.Complete the accompanying table. Level of output and income (GDP - DI) Consumption Saving APC APS…

A: Marginal propensity to consume (MPC) refers to the additional consumption that occurs due to…

Q: Incorrect Question 5 Suppose that national income is unchanged, taxes decrease, consumption remains…

A: Interest rates would decrease and money supply would increase because allready allready taxes have…

Q: The nation's disposable income increases by 400 billion in as a result consumer spending increases…

A: The marginal propensity to consume shows the increase in the consumption per unit increase in the…

Q: The US economy slowed significantly in early 2008, and policy makers were extremely concerned about…

A: Answer a) Amount of government spending = $700 billionMPC = 0.5

Q: Aggregate Variables Value (in billions of dollars) in the base year Consumption spending $900…

A: a) Real GDP is given as Consumption + investment + government spending = $900+400+200 = $1500…

Q: If in an economy MPC is 0.8 and investment increase by $5 billion. How much there is an increase in…

A: The marginal propensity to consume = 0.8 Increase in investment = $5 billion

Q: When real GDP is zero, investment is $2.0 trillion, government expenditure is $1.5 trillion, exports…

Q: If in an economy MPC is 0.8 and investment increase by $1000 million, calculate total increase in…

A: The marginal propensity to consume, MPC = 0.8 The increase in the investment = $1000

Q: 14. Explain the statement that for small spending rates (r 1/2), the percentage change in the…

A: * Hi there , as you have posted multiple questions , as per our guidelines we are only going to…

Q: J.Complete the accompanying table. Level of output and income (GDP- DI) Consumption Saving APC APS…

A: Marginal propensity to consume (MPC) refers to the additional consumption that occurs due to…

Q: MPC is 0.875. When tax increases by $1, GDP will decrease by $8. by $1, GDP will decrease by $7. by…

A: MPC = 0.875 Using the Tax multiplier formula

Q: Given that: The government expenditure G= 40, the investment the consumption C=(0.75)Ya+10, the…

A: Under the expenditure approach, national income is equal to the sum of expenditure incurred by the…

Q: iven that G=30, l=50,C = 0.7Y, + 82,T = 0. IY +20 hen the disposable income in the equilibrium level…

A: C = 0.7Yd+82 T = 0.1Y+20 Yd = Y - T Therefore, C = 0.7(Y-0.1Y-20)+82 At equilibrium, Y = C+I+G…

Q: TABLE 2. Finding Equilibrium After a $30 Billion Investment Spending Decrease (All Figures in…

A: The measure that depicts the final value of goods and services being produced in an economy during…

Q: If MPC is 0.9 and increase in investment is of $ 100 billion. Find the increase in national income.

A: Given, MPC = 0.9 Increase in investment = $100 Increase in national income = ?

Q: QUESTION 6 Refer to the table. If the full-employment real GDP is $100, the: Consumption (after…

A: The ‘inflation gap’ measures the difference between the ‘current level of real GDP’ and the…

Question

- If personal income taxes are increased, disposable income and consumption

	increase.
	stay the same.
	decrease.
	change in an unpredictable direction

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

3. If taxes increase, then: a. disposable income decreases b. disposable income increases c. consumption increases d. private savings increase
If consumption expenditures are $1800 million, gross investment is $450 million, imports are $350 million, exports are $180 million, government expenditure on goods and services is $120 million, and government transfer payments are $180 million and net taxes are $250 million; a) How much is the disposable income? b) Calculate the national savings.
8- A person’s disposable income decreases, and his personal income remains unchanged. This is because of ______. a. Decreased personal taxes b. Increased personal taxes c. Increased corporate taxes d. Unemployment reasons
3. The national consumption function of a country is C = 400 + 0.8Yd. The government only provides transfer payments of 100, without ever collecting taxes from its citizens. If the national income of the country is 1000. Determine: a. Consumption and savings of the people of the country. b. Disposable income for the people of the country. Please solve subparts a and b thank u
b) calculate gross private domestic investment $_______________ trillion (round to one decimal point) c) based on the information given, calculate personal income $____________ trillion (round to one decimal point) calculate personal disposable income $______________trillion (rounded to one decimal point)
The nation's disposable income increases by 400 billion in as a result consumer spending increases by 220 billion therefore the MPC equals what
49. What could increase investment spending? a) An increase in inflation. b) An increase in market rate of interest. c) An increase in business taxes. d) A decrease in the Index of Business Confidence e) A technological breakthrough creating new products or improving production efficiency
1 Which one of these will be deducted from gross output to determine the net output? a. Intermediate consumption b. Factor income from abroad c. Total government spending d. Private income
44. Which component of GDP will increase if disposable income increases? a. Government spending b. Investments c. Consumption d. Net exports
True or False Any change in spending (C, I, or G) will set off a chain reaction, leading to a multiplied change in GDP
Suppose GDP is $ 15 trillion, with $ 8 trillion coming from consumption, $ 2.5 trillion coming from gross investment, $ 3.5 trillion coming from government expenditures, and $ 1 trillion coming from net exports. Also suppose that across the whole economy, personal income is $ 12 trillion. If the government collects $ 1.5 trillion in personal taxes, then disposable income will be: a) $ 13.5 trillion b) $ 12.0 trillion c) $ 10.5 trillion d) None of these are correct
ECONOMICS An economy has neither imports nor income taxes. The MPC is 0.75 and the real GDP is $120 billion. The government increases expenditures by $4 billion. The multiplier is _____ and the change in real GDP from the increase in government expenditures is _____ billion.