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Q: Give an example of any factor that influences the size of the multiplier?
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Q: Logically discuss the impact of the increase in government taxes on consumption in the long run.
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Q: Use the following equations for exercises C = $…
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Q: How does an increase in tax influence the size of the multiplier
A: We know, Ad is given by, AD= C+ b(y-T)+I+G
Q: Give an example of any factor that influence the size of the multiplier
A: Below is the formula for the Multiplier: Multiplier = 11 - MPCMPC = Marginal Propensity to Consume
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Logically discuss the impact of the increase in government taxes on consumption.
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- Logically discuss the impact of the increase in governmenttaxes on consumption in the long run.What are the justifications for imposing tax on consumption instead of income by the government of Bahrain?Why would a higher tax rate lower the government purchases multiplier? What does the tax rate have to do with the government purchases multiplier?
- Use the following equations for exercises C = $ 100 + .8 Y I = $ 200 G = $ 250 X = $100 - .2 Y a.What is the equilibrium level of real GDP? b.What is the new equilibrium level of real GDP if government spending increases by $ 150? c.What is the new equilibrium level of real GDP if government spending and taxes both increases by $ 150?According to computer estimates using a traditional macroeconomic model, the Obama administration found that the multiplier for tax cuts and government expenditures were respectively a. 0.99 and 1.59 b. 1.59 and 0.99 c. 1.3 and 1.7 d. 1.7 and 1.3Give an example of any factor that influence the size of the multiplier
- How do you recommend the government change GDP and taxes to stabilize the economy in each of the following scenarios? Economic growth has started slowing and the unemployment rate has increased over the past four months. There has been strong growth in GDP over the past year, unemployment is very low, and inflation has started to rise. Prices are stable, unemployment is low and the economy is growing at an average rate.What is your MPC? Would a welfare recipient and a millionaire have the same MPC? What determines a person’s MPC?In the budget presented by the government, far reaching tax rebates are provided to all classes of tax payers. A researcher therefore conducts a 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.
- During the past five decades, there has been a shift in the composition of the federal budget toward more spending on income transfers and health care and a smaller share for national defense. Does economics indicate that this change will help Americans achieve higher living standards?True or False? Explain: The multiplier effect is likely to be greatest when the government spending is targeted at the poorest The poor will always spend most of the money they get as benefits as soon as possible Multiplier effect does not depend on who receives the money The richest people will spend a larger proportion of their money than the poorestWhat effect an increase of government spending will have on the output equilibrium in the goods market? Explain using autonomous spending. please explain
