If taxes decreases, the likely impact on an economy isa decrease in real GDP, decrease in unemployment, and an increase in the avg. price level.an increase in real GDP, decrease in unemployment and an increase in the avg. price level.a decrease in real GDP, increase in unemployment, and an increase in the avg. price level.a decrease in real GDP, increase in unemployment, and a decrease in the avg. price level.

If taxes decreases, the likely impact on an economy isa decrease in real GDP, decrease in unemployment, and an increase in the avg. price level.an increase in real GDP, decrease in unemployment and an increase in the avg. price level.a decrease in real GDP, increase in unemployment, and an increase in the avg. price level.a decrease in real GDP, increase in unemployment, and a decrease in the avg. price level.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

ChapterD: The Expenditure-output Model

Section: Chapter Questions

Problem 24CTQ: Exercise D24 Compare two policies: a tax cut on income or an increase in government spending on...

See similar textbooks

Similar questions

Exercise D24 Compare two policies: a tax cut on income or an increase in government spending on roads and bridges. What are both the short-term and longâ€”term impacts of such policies on the economy?
Consumption function: C=500+0.8Yd , net tax: T=500, government spending: G=500, investment: I=1200, export: X=500 and imprt: M=700. According to this Calculate the equilibrium level of output(Ye)
Which statement is false? Select one: a. If consumers and businesses both increase spending, everyone's incomes falls. b. Consumer spending is business income. c. Falling wages decrease demand in output markets. d. Business spending is consumer income. e. If consumers and businesses both increase spending, employment increases.
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 left
An economy’s aggregate demand is specified as follows:C = 300 + 0.8Yd, Investment (Io) = 230, Taxes (T) = 120 + 0.2Y, Government final purchase = 400, Export (X) =240 and Import (M) = 400.i. Find the equilibrium national incomeii. Find the value of the injections in this economyiii. How much withdrawals are when the economy is in equilibrium
Macroeconomics question: In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real GDP and reduce unemployment. If the MPS is 0.4, then it could increase government spending by: A. $20 billionB. $10 billionC. $40.50 billionD. $31.25 billion
ggregate demand includes Answer the quantity of goods and services both the government and customers abroad want to buy. the quantity of goods and services neither the government nor customers abroad want to buy. the quantity of goods and service the government wants to buy, but not the quantity of goods and services customers abroad want to buy. the quantity of goods and services customers abroad want to buy, but not the quantity of goods and services the government wants to buy.
A change in which of the following variables will have NO direct effect on domestic demand?domestic incomegovernment spendingtaxesthe interest rate (r)none of the above
The government is considering raising the tax rate on labor income. Explain the supply-side effects of such an action and use appropriate graphs to show the directions of change, not exact magnitudes. What will happen to: The supply of labor and why? The demand for labor and why? Equilibrium employment and why? The equilibrium before-tax wage rate and why? The equilibrium after-tax wage rate and why? Potential GDP? Explain your response with specifics and provide examples.
If the government wants to expand aggregatedemand, it can _________ government purchases or_________ taxes.a. increase; increaseb. increase; decreasec. decrease; increased. decrease; decrease
30. Increasing the debt ceiling a. is tied to the increase in the CPI. b. must be approved by Congress. c. must be approved by the Federal Reserve Bank. d. would have been opposed by John Maynard Keynes since his most important policy recommendation was to balance the budget. e. both b) and d) are correct.
In 1968, mandatory government spending was approximately ________ of GDP and in 2108 mandatory government spending was about ________ of GDP. 10%, 12.5% 5% , 5% 5%, 12.5% 10%, 10%