In the budget presented by the Government, far reaching tax rebates are provided to all classes of tax payers. A researcher therefore conducts survey to examine whether these tax reductions have led to a change in the consumption patterns of various social classes in the country. What kind of study would this fall under. Explain your answer

In the budget presented by the Government, far reaching tax rebates are provided to all classes of tax payers. A researcher therefore conducts survey to examine whether these tax reductions have led to a change in the consumption patterns of various social classes in the country. What kind of study would this fall under. Explain your answer

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter3: Economic Decision Makers

Section: Chapter Questions

Problem 3.10P

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The U.S. income tax is currently O progressive O proportional O regressive O proactive a tax.
Given: C = 250 + 0.8 Y I = 150 G = 300 TR = 100 NX = 100 t =0.25 i) Find the equilibrium level of income. ii) Suppose, because of current COVID-19 situation C 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)? iv) Draw a graph to show the appropriate changes between part i) and part ii).
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