Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 38, Problem 7DQ
To determine
The relationship between taxes and real GDP.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Table 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 contribution
Given the following information about each economy , either calculate the missing variable or determine that it cannot be calculated . [LO 7.2,7.3] a. If C=\$20.1 billion, I=\$3.5 billion G=\$5.2 billion, and NX=-\$1 billion, what is total income ? b. If total income is $1 trillion G=\$0.3 tr trillion , and C=\$0.5 trillion , what is I? c. If total expenditure is $675 billion, C=\$433 billion , I = $105 billion , and G=\$75 billion , what is NX ? How much are exports ? How much are imports?
9. True or false? If the statement is false, explain why: LO4
a. An internally held public debt is like a debt of the left hand owed to the right hand.
b. The Federal Reserve and federal government agencies hold more than half the public debt.
c. As a percentage of GDP, the federal debt held by the public was smaller in 2010 than it was in 1990.
d. As a percentage of GDP, the total U.S. public debt is the highest such debt among the world’s advanced industrial nations.
Chapter 38 Solutions
Economics (Irwin Economics)
Knowledge Booster
Similar questions
- 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_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_forward3. 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?arrow_forward
- QUESTION 3 What was the approximate level of GDP production in the United States in 2015? Oa. $18 trillion O b. $1.8 trillion O c. $180 billion O d. $1,800 million Oe. $18 billionarrow_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_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_forward
- 7 Suppose that the government increases its expenditure on goods and services by $100 billion and pays for these goods and services by raising autonomous taxes by $100 billion. What is the effect on aggregate demand and real GDP of each change individually and of the two combinedarrow_forwardQ.1.5 Which one of the following statements regarding fiscal policy and the budget is correct?(a) When the government plans to stimulate economic activity, it can increase spending 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_forward5. 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_forward
- According to the "advance" estimate from the Bureau of Economic Analysis, by how much did the United States' real GDP increase in the third quarter of 2023? 4.9% 2.5% O 7.6% -4.3% Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward14)Suppose that the annual rates of growth of real GDP of Econoland over a five-year period are as follows: Year Growth Rate (%) 1 3 2 1 3 – 2 4 4 5 5 Instructions: Round your answers to 2 decimal places. a. What was the average of these growth rates in Econoland over these 5 years? b. What term would economists use to describe what happened in year 3? (Click to select) Expansion Recession c. If the growth rate in year 3 had been a positive 2 percent rather than a negative 2 percent, what would have been the average growth rate?arrow_forward(a) Suppose the price level in an economy rises while the money wage rate remains constant. What happens to the quantity of real GDP supplied. How will this affect the aggregate supply or aggregate demand curve? What if the potential GDP increases? Which aggregate curve is affected and how? (b) Real GDP Consumption Planned Investment Government Purchases Net Exports $1,000 $1,000 $100 $150 -$50 2,000 1,900 100 150 -50 3,000 2,800 100 150 -50 4,000 3,700 100 150 -50 From the table data provided, answer the following questions. The numbers in the table are in billions of dollars. Show all calculations. a. What is the equilibrium level of real GDP? b. What is the Marginal Propensity to Consume? c. What is the multiplier value in this economy? d. If potential GDP is $4,000 billion, is the economy at full employment? If not, what is the condition of the economy? e. If the economy is…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Brief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage LearningPrinciples of Macroeconomics (MindTap Course List)EconomicsISBN:9781285165912Author:N. Gregory MankiwPublisher:Cengage LearningPrinciples 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 LearningPrinciples of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
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