Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
20th Edition
ISBN: 9780078021756
Author: McConnell, Campbell R.; Brue, Stanley L.; Flynn Dr., Sean Masaki
Publisher: McGraw-Hill Education
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Chapter 34.6, Problem 3QQ
To determine
Impact of tax cut.
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Students have asked these similar questions
Assume there is a decrease in the aggregate demand, if expansionary fiscal policy is being used, the following action could be taken
a. increase consumption by raising disposable income through cuts in personal taxes or payroll taxes
b. increasing government spending by raising after-tax profits through cuts in business taxes
c. increase government purchases through increased Federal Government spending on final goods and services and raising grants to state and local government to increase their expenditures on final goods and services
d. All of the above
When taxes increase, consumption _____, business investment ______, and real GDP output ______.
A. decreases shifting aggregate demand left; decreases shifting aggregate supply left;
decreases reducing economic growth, and lowering the standard of living.
B. increases shifting aggregate demand right; increases shifting aggregate supply right;
increases resulting in sustained economic growth, and a higher standard of living.
C. decreases shifting aggregate demand left; decreases shifting aggregate supply left;
increases resulting in sustained economic growth, equality and prosperity for all.
D. None of the answers are correct.
Africa's government has increased its spending this year, leading to a growing budget deficit.
How will this growing budget deficit affect the economy? Your answer should discuss interest rates, private investment, and aggregate expenditure.
Chapter 34 Solutions
Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
Ch. 34.1 - Prob. 1QQCh. 34.1 - Prob. 2QQCh. 34.1 - Prob. 3QQCh. 34.1 - Prob. 4QQCh. 34.5 - Prob. 1QQCh. 34.5 - Prob. 2QQCh. 34.5 - Prob. 3QQCh. 34.5 - Prob. 4QQCh. 34.6 - Prob. 1QQCh. 34.6 - Prob. 2QQ
Ch. 34.6 - Prob. 3QQCh. 34.6 - Prob. 4QQCh. 34 - Prob. 1DQCh. 34 - Prob. 2DQCh. 34 - Prob. 3DQCh. 34 - Prob. 4DQCh. 34 - Prob. 5DQCh. 34 - Prob. 6DQCh. 34 - Prob. 7DQCh. 34 - Prob. 8DQCh. 34 - Prob. 1RQCh. 34 - Prob. 2RQCh. 34 - Prob. 3RQCh. 34 - Prob. 4RQCh. 34 - Prob. 5RQCh. 34 - Prob. 6RQCh. 34 - Prob. 7RQCh. 34 - Prob. 8RQCh. 34 - Prob. 9RQCh. 34 - Prob. 1PCh. 34 - Prob. 2PCh. 34 - Prob. 3PCh. 34 - Prob. 4PCh. 34 - Prob. 6PCh. 34 - Prob. 7P
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- Please answer the question below: If the current real GDP is P700 billion, which of the following policies would bring the economy to potential output? a. increase government spending by P25 billion b. increase government spending by P100 billion c. increase government spending by P20 billion d. decrease government spending by P100 billion If current real GDP is P700 billion, which of the following policies would bring the economy to potential output? a. decrease taxes by P100 billion b. increase taxes by P100 billion c. decrease taxes by P25 billion d. increase taxes by P25 billion * the attached photo is just connected to the question *arrow_forwardPlease consider the attached photo; that is connected to the question: If the current real GDP is P700 billion, which of the following policies would bring the economy to potential output? a. increase government spending by P25 billion b. increase government spending by P100 billion c. increase government spending by P20 billion d. decrease government spending by P100 billion. The tax multiplier is: a. -0.8 b. -1.25 c. -5 d. -4arrow_forwardRelevant knowledge is important because it is important to understand that the federal budget deficit affects all aspects of the economy, but also the state of the economy affects the federal budget. Suppose that the federal budget is balanced when GDP is at potential GDP. If equilibrium GDP falls below potential, how and why would the budget change.arrow_forward
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