Microeconomics: Principles Problems & Policies (McGraw-Hill Series in Economics)
20th Edition
ISBN: 9780077660727
Author: McConnell
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 18, Problem 5DQ
To determine
The most important source of revenue and expenditure for the state and local governments.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
(Last Word) The combined cost of Social Security and Medicare programs was what percent of U.S. GDP in 2008
(A) 7.6
(B) 12.4
(C) 17.2
(D) 2.9
Suppose demand and supply are given by: (LO3, LO4)Qx d = 14 − 1/2Px and Qx s = 1/4Px − 1c. How much tax revenue does the government earn with the $12 tax when the new equilibrium quantity is 2 units after tax .
3. a. Suppose that in a year when GDP is rising rapidly you also observe theGovernment budget balance increasing. How can you explain this correlation?
b. Now suppose instead that in a year when GDP is rising rapidly you also observethe Government budget balance decreasing. How can you explain this correlation?
Chapter 18 Solutions
Microeconomics: Principles Problems & Policies (McGraw-Hill Series in Economics)
Knowledge Booster
Similar questions
- 5. Suppose the interest rate on a taxable corporate bond is 7 percent while a municipal, tax exempt bond has an interest rate of 5 percent, and they are similar in every other way.a. Assuming the income tax rate is 30 percent, calculate the after tax interest rate on the corporate bond. Is it higher or lower than the after tax return on the municipal bond?b. What is the income tax rate that equalizes the after tax return between the corporate bond and the municipal bond.arrow_forward5. Now assume that a recession ( triggered by a reduction of Aggregate Demand ) causes each of the five incomes to fall by 25 % . In other words , income is 75 % of what they used to be . Given the lower income , a ) what would be the total tax revenue paid by each of the five citizens ? b ) what is the total tax revenue for the small nation ?arrow_forward4. Suppose that there are two households in the economy, A and B, that they face the same wage rate w, and that the government initially uses a proportional income tax according to which each household must pay a fraction t of its labor income as income tax. Assume that given this tax scheme household A chooses to work full time while household B chooses to work part time. Now suppose that the government is interesting in studying the impact of changing the tax system to a progressive tax system where the household work- ing full time would pay a tax rate th >t while the household working part time would pay a rate ti < t. (a) Draw a graph of the impact of this change on the budget constraint that households face with the two different tax systems. (b) What would such a change in the tax system imply for the optimal choice of the two households?arrow_forward
- 8. Suppose the computer industry receives an initial extra income for $100. Think about the multiplier process in the first round. I). How much more income will the wire industry receive in the first round? O. $20 O. $25 O. $45 O. $55 ii). How much income will local workers receive? O. $20 O. $25 O. $45 O. $55arrow_forwardSuppose that gifts were taxed at a rate of 10 for amounts up to 100,000 and 20 for anything over that amount. Would this tax be regressive or progressive?arrow_forward10. A decrease in Federal government taxes would: O. decrease in consumption and savings O. decrease transfers and government purchases O. increase in consumption and savings O. decrease importsarrow_forward
- If the tax code exempts the first $20,000 of income from taxation and then taxes 25 percent of all income above that level, then a person who earns percent and a marginal tax rate of $50,000 has an average tax rate of percent. O 15, 25 O 25, 15 O 25, 30 O 30, 25arrow_forward4. What have been the various approaches advocated to reform budgeting processes at the state and local levels? 5. What are the five key areas of future state and local budget needs? Which one do you think is the most critical and why? Explain.arrow_forwardApproximately how many people are employed in the federal bureaucracy? O 1 million-1.4 million O 1.5 million -1.7 million O2 million-2.4 million O 2.5 million - 3 millionarrow_forward
- What are some fiscal policies for improving the technologies that the economy will have to draw upon in the future?arrow_forwardCrusoe will live this period and the next period as the lone inhabitant of his island. His only income is a crop of 100 coconuts that he harvests at the begin- ning of each period. Coconuts not consumed in the current period spoil at the rate of 10 percent per period. (LO5) a. Draw Crusoe’s intertemporal budget constraint. What will be his consump- tion in each period if he regards future consumption as a perfect, one-for- one substitute for current consumption? b. What will he consume each period if he regards 0.8 unit of future consump- tion as being worth 1 unit of current consumption?arrow_forwardTable 7P - 1 shows the price of inputs and the price of outputs at each step in the production process of mak ing a shirt Assume that each of these steps takes place within the country . [LO 7.1 , 7.3 ] a. What is the total contribution of this shirt to GDP , using the standard expenditure method ? b . If we use a value -added method (i.e , summing the value added by producers at each step of the production process , equal to the value of output minus the price of inputs ) , what is the contribu tion of this shirt to GDP ? c If we mistakenly added the price of both inter mediate and final outputs without adjusting for value added , what would we find that this shirt contributes to GDP ? By how much does this overestimate the true contributionarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Brief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Macroeconomics (MindTap Course List)EconomicsISBN:9781285165912Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Macroeconomics (MindTap Course List)EconomicsISBN:9781305971509Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...EconomicsISBN:9781285165875Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning