MyLab Economics with Pearson eText -- Access Card -- for Foundations of Economics
8th Edition
ISBN: 9780134518312
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 32, Problem 7MCQ
To determine
The effects on the economy, if the government lowers the income tax rate.
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Students have asked these similar questions
Which of the following is incorrect regarding tax revenues?
a.they increase during recessions
b.they increase during economic expansions
c. they are a revenue source in the government's budget
d. they change with changes in the tax rate
If the federal government lowers business and personal tax rates we would expect
a interest rates to rise
B potential GDP to fall
C fiscal policy to increase
D consumer and investment spending to increase
The government is considering raising the tax rate on labor income. Explain the supply-side effects of such an action and use appropriate graphs to show the directions of change, not exact magnitudes. What will happen to:
The supply of labor and why?
The demand for labor and why?
Equilibrium employment and why?
The equilibrium before-tax wage rate and why?
The equilibrium after-tax wage rate and why?
Potential GDP?
Explain your response with specifics and provide examples.
Chapter 32 Solutions
MyLab Economics with Pearson eText -- Access Card -- for Foundations of Economics
Ch. 32 - Prob. 1SPPACh. 32 - Prob. 2SPPACh. 32 - Prob. 3SPPACh. 32 - Prob. 4SPPACh. 32 - Prob. 5SPPACh. 32 - Prob. 6SPPACh. 32 - Prob. 7SPPACh. 32 - Prob. 8SPPACh. 32 - Prob. 9SPPACh. 32 - Prob. 10SPPA
Ch. 32 - Prob. 1IAPACh. 32 - Prob. 2IAPACh. 32 - Prob. 3IAPACh. 32 - Prob. 4IAPACh. 32 - Prob. 5IAPACh. 32 - Prob. 6IAPACh. 32 - Prob. 7IAPACh. 32 - Prob. 8IAPACh. 32 - Prob. 9IAPACh. 32 - Prob. 10IAPACh. 32 - Prob. 11IAPACh. 32 - Prob. 1MCQCh. 32 - Prob. 2MCQCh. 32 - Prob. 3MCQCh. 32 - Prob. 4MCQCh. 32 - Prob. 5MCQCh. 32 - Prob. 6MCQCh. 32 - Prob. 7MCQCh. 32 - Prob. 8MCQ
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Similar questions
- Have 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 role taxes policy plays in determining the GDP or national income in an economy? Explain with numerical examples?arrow_forwardWhich one of the following statements regarding fiscal policy and the budget is correct?(a) When the government plans to stimulate economic activity, it can increasespending or reduce taxes;(b) Revenue from tax is always greater than government spending in SouthAfrica;(c) Demand management only refers to fiscal policy;(d) A contractionary fiscal policy should be implemented to combatunemployment.arrow_forward
- Presidential candidate trump promised in mid 2016 that if he became President, he would never have $400 billion budget deficit. As the President of the US from 2016-2020, he has Group of answer choices Broken his promise since the budget deficit for 2019-2020 is $350 billion. Kept his promise since the budget deficit for 2019-2020 is $984 billion trillion. Broken his promise since the budget deficit for 2019-2020 is $400 billion. Kept his promise since the budget deficit for 2019-2020 is $350 billionarrow_forwardC = 1,600 + 0.8(Y – T) I = 1000 G = 1,800 X = M = 0 T = 3,000 + 0.01Y Suppose the flow of GDP consistent with full employment is 10,000. What marginal tax rate would achieve full employment?arrow_forwardWhen government increases a fixed tax, consumption schedule a. shifts downward in a parallel manner. b. shifts upward in a parallel manner. c. becomes vertical. d. becomes horizontal.arrow_forward
- TAXES Taxes are any governmental action that reduces the real income of wage-earners as well as non-working Americans. The action can also reduce the profit of business. Taxes act as a leakage from the GDP – Income Stream and will reduce both income and GDP over time. Think of taxes…. Did you buy gas on the way to school? Did it include a tax? When you purchase clothing at the mall, how much is the tax? Driver’s License? Fishing License? Hunting License? Tax on Concert Ticket? Tax on Airline Ticket? Are taxes withheld from your paycheck? Income, FICA and state or local taxes Paying bridge tolls? Taxes on personal or real property? Tax on new tires? Alcohol? Cigarettes? Imports with tariffs? Do all these taxes and licenses reduce our disposable income? Why do we sacrifice and pay these taxes? What are the ways that government helps us?arrow_forwardFiscal drag is where Select one: a.there is a lag in government spending having any effect. b.increases in nominal wages push taxpayers up tax brackets. c.increases in government spending hold back economic growth. d.taxpayers look for ways to avoid paying tax they perceive is unfair.arrow_forwardWhich of these is MOST LIKELY to occur after the government increases taxes? A.) Consumer spending decreases B.) Annual deficits increase. C.) Government programs decrease D.)The national debt increasesarrow_forward
- Which of the following are used in fiscal policy?A. government purchases, transfer payments and taxesB. taxes and government purchasesC. transfer payments onlyD. taxes and transfer paymentsE. government purchases onlyarrow_forwardWhich of the following is true of indirect business taxes? a) They are included in corporate profits. b) They are not included in the GDP. c) They reduce the value of total economic output thereby reducing the value of the GDP. d) They are collected by business firms that act as agents for the government. e) They are the same as personal income taxes.arrow_forwardWhat is the difference between indirect taxes and net indirect taxes? Macro economicsarrow_forward
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