Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Question
Chapter 15, Problem 10RQ
To determine
To ascertain the inflation tax and action of the government tax on individuals and groups.
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1) which of the following is the government most likely to do if they want to lower inflation ......
(a) increase goverment spending
(b) deacrese taxes
(c) increase taxes
(d) issue stimulus checks to the public
Inflation
a.What is inflation and how is it calculated? List and explain the two types of inflation
b. Give two examples of who might be hurt by inflation and why. Give two examples of who might be helped by inflation and why.
c. Inflation and how to use Fiscal Policy to address the problem of Inflation.
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in 2017 the mortgage interest deduction became even more regressive than in thepast. Regressive, in this context, means that it benefits the wealthy significantlymore than those lower on the income scale. The reason is simple: Mortgage interestis a function of the size of the mortgage. Since the wealthy tend to buy moreexpensive homes, their mortgages are larger and their tax benefits larger. Does thatmatter to your opinion of the subsidy?
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Similar questions
- Under what general macroeconomic circumstances might a government use expansionary fiscal policy? When might it use contractionary fiscal policy?arrow_forwardHave the spending and taxes of the U.S. federal government generally had an upward or a downward trend in the last few decades?arrow_forwardwhat is the effects of indirect taxes on inflation and demand.arrow_forward
- Choose the letter of the correct answer. 1. This kind of tax is derived from the individuals, corporate estates, and trusts income. A. Donors tax B. Capital gains tax C. Income tax D. Estate tax 2. This is a kind of tax on the rights of the decreased person to transmit his/ her estate to lawful heirs and beneficiaries at the time of death. A. Donors tax B. Capital gains tax C. Income tax D. Estate tax 3. This is a tax levied on gifts and is imposed on the gratuitous transfer of property between two or more persons who are living at the time of the transfer. A. Estate tax B. Capital gains tax C. Income tax D. Donor Tax 4. A tax imposed on loan agreements and papers evidencing the acceptance, assignment, sale or transfer of an obligation. A. Documentary tax B. Capital gains tax C. Income tax D. Estate tax 5. A tax levied on the assessed value of land and permanently attached improvements owned by individuals or corporations. A. Property tax B. Capital gains tax C. Income tax…arrow_forwardWhat kind of fiscal policy will you use to fight against inflation. Explain it briefly.arrow_forwardThe Government and Fiscal Policy (chapter 16) If inflation is a major issue in the economy, what would be the correct fiscal policy response from an economic perspective? Why would members of Congress be unlikely to support such actions? Note: please do not give a copy & paste answer from Chegg. or course heroarrow_forward
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