In the economy of Akron, the tax and savings functions are as follows: T=220+0.2Y S=-140+0.3Y a) What is the equation for the consumption function? Remember to enter a minus (-) sign to indicate negative values. C-(Click select) b) If Y=1100, complete the following table: Y 1100 Yo Y
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- Assume taxes are zero and an economy has a consumption function of C = 0.80 (Yd) + $879.06. How much savings take place if disposable income is equal to 3,258.02? Round your answer to two digits after the decimal and include a negative sign if you find negative savings which is borrowing.If a lump-sum income tax of $30 billion is levied and the MPS is .4, the consumption schedule will shift ______?The aggregate consumption function is C = 800 + .8Yd. If income is $2,000 and net taxes are $500, consumption equals Group of answer choices 1,500. 2,000. 2,050. 2,150
- What is the effect on savings of a tax cut of $15 billion? Is this inflationary or deflationary? Assume that the MPC is 0.9.a tax decrease will decrease consumption a tax increase will increase consumption consumption and after-tax income are unrelated consumption varies inversely with after-tax incomes consumption varies directly with after-tax incomesAssuming you are the Minister of Finance and Economic Planning for Nigeria, in charge of Fiscal Policy. The Research Director of the Ministry brought you the following data on Nigeria’s for the previous fiscal year, 2021. An examination of the data reveals that, during the fiscal year 2021, households in Nigeria saved 20% of their disposable income (Yd) and spent the rest on consumption. In addition, ₦5,000.00 was spent on Consumption expenditure (C), which is independent of income and Gross Private Investment (I) was ₦ 7,000.00. Total Government expenditure (G) which stood at ₦8,000.00 was supposed to be financed by a lump sum tax of ₦2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at ₦2,500.00. In addition, the country’s import (M) during the previous fiscal year comprises of ₦1,000.00 which was independent of the country’s national income and 10% which was dependent of the country’s national income. Given these data on…
- Suppose a closed economy has an aggregate consumption function given by C = 50 + 0.50Yd and generates $2500 output and income in equilibrium. Suppose also that the government spends 400 and imposes a lump-sum tax of 100. What is the level of intended investment?Within the circular flow of income, withdrawals are composed ofA) saving, net taxes and import expenditure.B) consumption, net taxes and import expenditure.C) saving, net taxes and export expenditure.D) saving, investment and import expenditure.If a lump-sum income tax of $30 billion is levied and the MPS is .4, the consumption schedule will shift ______? a. downward by 18 billion b. upward by $18 billion c. downward by $30 billion d. downward by $12 billion
- Assume in the economy there are only lump-sum tax and that there is no progressive tax rate (i.e. the marginal tax rate is 0, or t=0), disposable income will A) Decreases when net taxes decrease B) Decreases when income decreases C) Increases when saving decreases D) All the above. Answer neatly with proper explanation of the each optionSuppose a closed economy has an aggregate consumption function given by C = 100 + 0.75Yd and generates $3000 output and income in equilibrium. Suppose also that the government spends 300 and imposes a lump-sum tax of 50. What is the level of intended investment? (round your answer to the nearest whole value)Calculate the MPC when MPS is given to be as 0.9