The Laffer Curve illustrates that government can collect the same amount of tax revenue by choosing either a low rate of taxation or a high rate of taxation. O True O False
Q: Miller wants to discourage energy drink purchase, so he's considering a $1 tax or $2 tax on the…
A: The Laffer curve, given by Arthur Laffer, is a supply-side economics' paradigm that illustrates the…
Q: Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 30 billion…
A: here we calculate the given by following method as below;
Q: Suppose the federal government requires beer drinkers to pay a $2 tax on each case of beer…
A: With the introduction of tax quantity of beer sold will decrease as there will be increase in price…
Q: The idea that an increase in a tax rate generates a reduction in the tax base that makes the net…
A: Imposition of tax on a good generates tax revenue for the government
Q: ose George's income is $10,000 and he pays a tax of $1,000, but Laura's income is $50,000 and she…
A: Tax is referred to financial charge that is compulsory for every individual. Taxation is a term used…
Q: Which is wrong? EXPLAIN a. The government should tax itself. b. The government can tax itself. c.…
A: In an economy, government is the highest ruling authority that runs the economy based on its…
Q: Why the deadweight loss from a tax is proportional to the square of the tax rate? I can't understand…
A: A tax is a financial charge imposed by the state on economic agents for certain economic processes,…
Q: Which of the following is true in the United States? O A. Only state governments can collect taxes.…
A: Tax is the compulsory payment to the government and it is the main source of government revenue.…
Q: Suppose the government imposes a specific tax of t=2 per unit. a. How do the equilibrium price and…
A: Given Information Demand Curve = 120 - 10PSupply Curve = 10P Tax, r = 2 per unit
Q: f the government quadruples the amount of tax on gasoline, can you be sure that revenue fromg…
A: Tax: refers to the unilateral payment towards the government made by the public. Deadweight loss:…
Q: Most economists believe that a seduction in all statutory federal income tax rates in the United…
A: The supply of labor and other factors considering in and out of a city is more elastic than the…
Q: Suppose that the government has decided to place a $2 per litre tax on soft drinks. In this market,…
A: The economics as a study is based upon the idea and decision making where the resources are to be…
Q: According to studeis undertaken by the U.S. Department of Agriculture, the price elasticity of…
A: Because of increase in price of cigarettes,consumption of cigarettes would decrease. Because price…
Q: In Virginia, in 2019, if you made $10,000 a year in income, you paid $120 + 5% of excess over…
A: A tax is a necessary fee or a type of monetary charge that is imposed by a government on a person or…
Q: Now we lOok at the role taxes play in Ose.we ha economy of the type in Sections 10-4 and 10-5,…
A: In a closed economy, the equilibrium level of income is attained at Y = Aggregate demand Where, AD…
Q: Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 40,000…
A: An excise tax is a tax on each unit of a commodity. If this tax is collected from sellers the demand…
Q: Which of the following statements are true: O A gasoline tax can be fair in the sense of the…
A: A gasoline tax can be fairin the sense of the benefits principle and it can be efficient as a…
Q: Imposition of new taxes levied on goods and services will tend to remain constant remains the same…
A: The demand curve shows the relationship between price and quantity demanded of goods and services.…
Q: As government keep raising tax rate (t) on buyers, government will continually collect higher tax…
A: The government influences the amount of discretionary income available to households by raising or…
Q: 22. If the government decide to increase taxes on sugar, who do you think will carry the burden of…
A: As sugar is a necessary, therefore, its demand is inelastic (i.e. with a change in the price of the…
Q: conomists in Champaign have been studying the local market for pizza. The market is described in the…
A: With tax imposed in the free market, the equilibrium quantity will fall and the market price will…
Q: Suppose the government decides to raise the gasoline tax as a way to reduce air pollution and…
A: Ans in step 2
Q: Suppose that the government wants to tax wealthy people. They notice that only wealthy people buy…
A: The given tax on Yachts is an example of a luxury tax. A luxury tax is a tax that is imposed on the…
Q: Suppose you earn $40,000 per year and pay taxes based on marginal taxX rates. The first tax bracket,…
A: Income tax is that type of tax which is imposed by government on the income of individuals &…
Q: Consider an economy in which an individual (A) is consuming two goods (X and Y). The government is…
A: Consumption: It refers to the process in which a consumer spends money on goods and services so that…
Q: Tax revenue when tax is $80 Tax revenue when tax is $40 Tax revenue when tax is $120 The graph shows…
A: From the demand schedule, the demand equation is P = 200 – 2Q and the supply equation is P = 40 +…
Q: In an economy such that: C = 200 + 0.80 (Y – T) Md = 0.20 Y - 10 R I = 40 - 20 R…
A:
Q: Identify the effect of increase in tax rates on either demand or supply curve and the equilibruim…
A: Taxes are the form of government revenue which are collected through the goods and services…
Q: d. Given C and I above, if government increases both G and T by 30, calculate equilibrium Y. e.…
A: We use the following formula, Income = Aggregate expenditure Y = C + I + G
Q: Figure 4-11 LAFFER CURVE 100 в Tax Revenue Refer to Figure 4-11. On the Laffer curve shown, tax…
A: The Laffer curve illustrates the relationship between the tax rate imposed by the government and the…
Q: An example of an expansionary fiscal policy is O a) eliminating certain deductions for taxes on…
A:
Q: Could you please explain in brief why taxation is considered as the lifeblood of the state.
A: The nations tend to work with the goal to achieve the maximum possible level of growth. There are…
Q: Answer the attached question
A: When the government imposes per unit of tax then the burden of tax is shared by the buyer and…
Q: 6. Changes in taxes The following graph shows the aggregate demand curv Shift the aggregate demand…
A: When there is a fall in the tax rate in the economy, people are left with more disposable…
Q: 1.Suppose that the government puts a tax of 15 cents a gallon on gasoline and then…
A: Since you have asked multiple-parts questions, we will solve only the first three questions for you.…
Q: Suppose there is a bill to increase the tax on cigarettes by $1 per pack coupled with an income tax…
A: When the price of a good increase, its quantity demanded decreases. The imposition of tax leads to…
Q: Accordingtothetextbook,whichofthefollowingstatementsis(are)correct? (x) When a taxpayer attempts…
A: Taxation refers to the compulsory charge which the citizens of the country have to pay to the…
Q: If the federal government has a budget surplus, then it is definitely the case that revenues are…
A: Government collects taxes in order to maintain public expenditure.
Q: Suppose the federal government requires beer drinkers to pay a $2 tax on each case of beer…
A: Given: The federal government requires beer drinkers to pay: $2 tax on each beer: To Find:…
Q: Suppose that your state raises its sales tax from5 percent to 6 percent The state revenue…
A: Given: Sale increased from 5% to 6%
Q: How does tax affect AE line? Draw graphs to explain
A: Aggregate expenditure is composed of consumption spending, investment spending, government purchases…
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- Course: Macroeconomic - IS-LM Model Prove mathematically the following: Given an increase in the proportional tax on income(t), what happens to the level of output and to the tax?" . Hint: for demostration, use the IS general function for a closed economy Y = C + I + G, where C = a + c*YD and YD = Y + TR - Y*t (where t = proportional income tax) and realize changes i.e., from "t1" to "t2"3. Suppose that we have a Solow model with one twist. The twist is that thereis a government. Each period, the government consumes a fraction of output,sG. Hence, the aggregate resource constraint is:Yt = Ct + It + Gt.Where Gt = sGYt. Define private output as Ypt = Yt − Gt. Suppose thatinvestment is a constant fraction, s, of private output (consumption is then1 − s times private output). Otherwise the model is the same as in the text.104(a) Re-derive the central equation of the Solow model under this setup.(b) Suppose that the economy initially sits in a steady state. Suppose thatthere is an increase in sG that is expected to last forever. Graphicallyanalyze how this will affect the steady state value of the capital stockper worker. Plot out a graph showing how the capital stock per workerwill be affected in a dynamic senseShow that, when using a traditional economic production function,doubling our population can double our output if capital stocks alsodouble. Use the production function: Q = AK L , where A representstechnology in an economy, K capital, and L labor. Double K and L andshow that Q also doubles, assuming α=β=1/2. Now show that, when we incorporate natural capital into thediscussion, doubling the population does not increase output in thesame way (since natural capital cannot also grow). Use theproduction function: Q = AK L N , where N is natural capital. DoubleK and L and show that Q less than doubles, assuming α=β=γ=1/3.
- What is Say’s Law?Discuss the validity of that theory for 21 century. What are the main critics towards Say’s Law?The belief that we can spend our way out of low growth is inconsistent with the best availableempirical evidence and ignores South Africa’s recent poor performance in using governmentspending as a tool to unlock much‐needed economic growth. Gambling with our future on riskyeconomic strategies that have failed elsewhere is something we are not prepared to do.’ TitoMboweni is South Africa's Minister of Finance. The increased government spending noted in Q.3.1. above has to be financed inone way or another. Describe three ways in which government spending can be financed.Julie lives for two periods. She works in the first, saves some of her income, and retires inthe second and lives off her savings. For every coconut she saves today, she earns an interestrate of r = 2%. Julie’s generation comprises of 1,000 people and each generation grows byn% relative to the previous one.a. In the first period Julie saves 100 coconuts for retirement. How many coconuts will shehave when she retires?b. Now suppose that the government implements a pay-as-you-go social security system,forcing every person in Julie’s generation to pay 100 coconuts to a social security fund thatwill distribute the money to the currently old. In exchange, when Julie retires each youngperson will pay 100 coconuts to the social security fund, and the revenue will be dividedequally among the future retirees. How much will be the revenue of the social securitysystem, and how many coconuts will each retiree will receive?c. What will have to be the range of values for n so that the government’s…
- Suppose we are in an economy with rich households and poor households. Rich and poor households have different consumption functions, with Cpoor = 100 + 35(Y poor − Tpoor) Crich = 100 + 15(Y rich − Trich) where Y rich, Y poor are the incomes of rich and poor households and T rich, T poor are the taxes faced by rich and poor households. We also have I = 200,G = 100, T = T poor + T rich = 100. Closing out the model, Y = C + I + G = Cpoor + Crich + I + G a Suppose that Y poor = Y rich Y2 (in other words, the total income of poor households is equal to total income of rich households.) Supposing further that T rich = T poor = 50, calculate equilibrium output Y . b Now suppose that Trich = 40,Tpoor = 60. What is equilibrium output now? c How can the government increase output without changing the deficit (hint: think about the difference between output in b and output in c.) d Now assume that T rich = 40, T poor = 60, but instead of output being split equally between rich and poor…(a) Explain the characteristics of the production function used in the Heckscher-Ohlin (H-O)model. (b) Explain with the help of a graph how we can determine the specific combination oftwo goods that can be produced in the economy in the H-O model.One of your clients, a mining company with operations in the Democratic Republic of Congo and Zambia, is concerned withthe current macroeconomic environment’s impact on their operations. Among their worries is the slowdown in global growth, which is expected to moderate from 5.9 in 2021 to 4.4 percent in 2022—half a percentage point lower for 2022 than in the October World Economic Outlook.You are required to critically discuss some of the major factors that drove the global growth trajectoryi) Pre-Covid-19 pandemic ii) at the height of the pandemic iii) going into 2022 and beyond.
- Exercise 4: Growth and capital over-accumulationSuppose two countries, A and B, with the same production function Y = KαL1−α. Thevalue of α is 0.30, the growth rate of population is 2% and the depreciation rate is 5%.a) Show that with price-taking firms the share of labor must be 1 − α.b) Compute the stock of capital, output and consumption per unit of labor in the steadystate if the savings rates were 25% for country A and 35% for country B.c) Compare both economies to the Golden Rule.d) Explain what would happen to both countries if suddenly their savings rate becamethe Golden Rule savings rate.a. How much more output does the $22 trillion U.S. economy produce when GDP increases by 1.0 percent? in BILLION not .22 b. By how much does this increase per capita income if the U.S. population is 340 million?a. Discuss the assumptions of the Fisher’s Intertemporal Choice Model b. Using Fisher's Intertemporal Choice model, consider the following scenario:i. Suppose Milo earns $1,750 in the first period and $2,500 in the second period. If he consumes $1,200 in the first period and $1,550 in the second period, what is the interest rate? ii. Now if Milo’s consumption changes to $1,800 in the first period and $2,000 in the second period, what is the new interest rate? c. Graphically depict and explain the Consumer’s optimum in the Fisher’s Intertemporal Choice Model.