Economics, Student Value Edition (6th Edition)
6th Edition
ISBN: 9780134123851
Author: Hubbard, R. Glenn; O'Brien, Anthony Patrick
Publisher: PEARSON
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Question
Chapter 23, Problem 23.2.10PA
To determine
Saving, marginal propensity to consume and marginal propensity to save.
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Students have asked these similar questions
The table gives the government outlays and tax revenues from 2015 through 2019 for two countries.
Year
Country A
Government outlays
(trillions of 2012 dollars)
Country A
Tax revenue
(trillions of 2012 dollars)
Country B
Government outlays
(trillions of 2012 dollars)
Country B
Tax revenue
(trillions of 2012 dollars)
2015
0.75
0.80
1.05
1.10
2016
0.80
0.83
0.90
0.92
2017
0.87
0.86
0.87
0.88
2018
0.95
0.95
0.85
0.83
2019
1.06
1.02
0.70
0.75
In 2017 country A had a ________ and country B had a ________.
A.
budget deficit; budget deficit
B.
budget surplus; budget deficit
C.
budget surplus; budget surplus
D.
budget deficit; budget surplus
E.
balanced budget; budget deficit
Economist Arthur Laffer famously pointed out that, in some cases, income tax revenue can actually go up when tax rates go down. Why might this be the case? Did it happen following the tax cuts of 2017?
Briefly write about the implications of Primary deficit
Chapter 23 Solutions
Economics, Student Value Edition (6th Edition)
Ch. 23.A - Prob. 1RQCh. 23.A - Prob. 2RQCh. 23.A - Prob. 3RQCh. 23.A - Prob. 4RQCh. 23 - Prob. 23.1.1RQCh. 23 - Prob. 23.1.2RQCh. 23 - Prob. 23.1.3RQCh. 23 - Prob. 23.1.4PACh. 23 - Prob. 23.1.5PACh. 23 - Prob. 23.1.6PA
Ch. 23 - Prob. 23.1.7PACh. 23 - Prob. 23.1.8PACh. 23 - Prob. 23.1.9PACh. 23 - Prob. 23.2.1RQCh. 23 - Prob. 23.2.2RQCh. 23 - Prob. 23.2.3RQCh. 23 - Prob. 23.2.4RQCh. 23 - Prob. 23.2.5RQCh. 23 - Prob. 23.2.6PACh. 23 - Prob. 23.2.7PACh. 23 - Prob. 23.2.8PACh. 23 - Prob. 23.2.9PACh. 23 - Prob. 23.2.10PACh. 23 - Prob. 23.2.11PACh. 23 - Prob. 23.2.12PACh. 23 - Prob. 23.2.13PACh. 23 - Prob. 23.2.14PACh. 23 - Prob. 23.3.1RQCh. 23 - Prob. 23.3.2RQCh. 23 - Prob. 23.3.3RQCh. 23 - Prob. 23.3.4RQCh. 23 - Prob. 23.3.5RQCh. 23 - Prob. 23.3.6PACh. 23 - Prob. 23.3.7PACh. 23 - Prob. 23.3.8PACh. 23 - Prob. 23.3.9PACh. 23 - Prob. 23.3.10PACh. 23 - Prob. 23.3.11PACh. 23 - Prob. 23.3.12PACh. 23 - Prob. 23.4.1RQCh. 23 - Prob. 23.4.2RQCh. 23 - Prob. 23.4.3RQCh. 23 - Prob. 23.4.4PACh. 23 - Prob. 23.4.5PACh. 23 - Prob. 23.4.6PACh. 23 - Prob. 23.4.7PACh. 23 - Prob. 23.4.8PACh. 23 - Prob. 23.4.9PACh. 23 - Prob. 23.4.10PACh. 23 - Prob. 23.4.11PACh. 23 - Prob. 23.4.12PACh. 23 - Prob. 23.4.13PACh. 23 - Prob. 23.5.1RQCh. 23 - Prob. 23.5.2RQCh. 23 - Prob. 23.5.3RQCh. 23 - Prob. 23.5.4PACh. 23 - Prob. 23.5.5PACh. 23 - Prob. 23.5.6PACh. 23 - Prob. 23.1RDE
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Similar questions
- Economist Arthur Laffer famously pointed out that, in some cases, income tax revenue can actually go up when tax rates go down. Why might this be the case?arrow_forwardBriefly explain the meaning of internal balance or government balanced budget.arrow_forwardBriefly discuss the effects of time lags in relation to fiscal policy, including: a comparison to monetary policy, what the level of fiscal policy will be, and its effect on fiscal policy during recession.arrow_forward
- What is the role of fiscal policy in developed countries? Give examplearrow_forwardRecently, a politician was interviewed about fiscal policy where she mentioned reducing the "tax gap." a. Indicate whether the following statements are "True" or "False" regarding the tax gap. • The tax gap is the difference between how much tax is collected and how much Congress requires to be collected. . The tax gap is the difference between actual Federal income tax collections and the amount the IRS projects should be collected if there is full compliance with all income tax laws. b. There are pertinent political and economic issues relative to the tax gap. Complete the items below concerning the tax gap: By most estimates, the net annual tax gap is What means could be employed to reduce the gap? Hire more ● • $405 billion. personnel. • Excessive activity could result in the public's reaction • Shouldn't the government attempt to close the tax gap and thereby eliminate most of the.arrow_forwardAn economy is described by the following equations: C = 1600 + 0.8(Y – T) I = 1000 G = 1800 T = 3000 + tY Where t denotes the marginal tax rate. Suppose potential GDP is Y* = 10,000. What marginal tax rate t would restore GDP to potential? a.0 b.0.1 c.0.2 d.0.3arrow_forward
- Suppose that Antonio, an economist from a business school in Georgia, and Caroline, an economist from a university in Massachusetts, are arguing over budget deficits. The following dialogue shows an excerpt from their debate: Caroline: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation. Antonio: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits. Caroline: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively. The disagreement between these economists is most likely due to . Despite their differences, with which proposition are two economists chosen at random most likely to agree? Having a single income tax rate would improve economic performance. Immigrants receive more in government benefits than they contribute in taxes.…arrow_forwardWhat is fiscal policyarrow_forwardBriefly explain whether each of the following statements is true or false. 2. According to the Ricardian equivalence proposition, a deficit-financed tax cut will be entirely saved by households.arrow_forward
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