MICROECONOMICS W/ CONNECT
21st Edition
ISBN: 9781308196077
Author: McConnell
Publisher: MCG/CREATE
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Question
Chapter 5, Problem 5RQ
To determine
Unfunded liabilities.
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Students have asked these similar questions
Which of the following is correct?
1) Expansionary fiscal policy during a recession means cutting taxes, increasing
government spending, or taking both actions.
2) The goal of expansionary fiscal policy is to rein in inflation.
3) Expansionary fiscal policy tends to lead to a smaller budget deficit.
O 4) Expansionary fiscal policy is always better than contractionary fiscal policy for
4)
the economy.
If the government deficit/GDP ratio remains constant at 6% a year, the real GDP growth rate is 4% a year and the real interest
rate is 1%, the public debt/GDP ratio will converge to the equilibrium level at
O 210%
O 305%
O 208%
O 368%
Suppose that a family's income is exactly the same as the poverty threshold.
This family's income deficit would be
and their ratio of income to poverty would be
O 0; 1
0 ; 0
1;0
O 1;1
Consider a family of four in 2008, whose poverty threshold is $22,024. If this family's total income was $12394, what
would their income deficit be?
income deficit: $
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Similar questions
- 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_forwardIf the real interest rate on government bonds is three percent, real GDP grows at one percent, the current debt-to-GDP ratio is forty percent and the primary budget deficit as a percentage of GDP is two percent, then the debt-to-GDP ratio will rise in a year by. percentage points. O a. 0.28 O b. 0.82 O c. 2.8 O d. 8.2 O e. 82arrow_forward13. Which fiscal policy would make a budget surplus larger or a budget deficit smaller? O lower taxes O increase in government purchases of goods and services O lower government transfers O higher interest ratesarrow_forward
- Suppose that the debt-to-GDP ratio is 0.53, the real interest rate on the debt is 6%, and the growth rate of real GDP is 3%. What is the maximum primary deficit or surplus (as a percentage of GDP) that the government can run and not increase the debt-to-GDP ratio? O A. 1.59% surplus O B. 1.59% deficit OC. 3.18% surplus O D. 3.18% deficitarrow_forwardWhich of the following statements is correct? Choose an answer: O 1. Regardless of which side of the market the tax is levied on, the more inelastic side of the market bears the higher tax burden. O 2. If the supply is more elastic than the demand, then the suppliers bear the greater tax burden than the buyers. 3. The tax burden is incurred on the side of the market where the tax is levied. O 4. The tax burden is always borne half by the supplier and half by the customer. O 5. If the demand is more inelastic than the supply, then the providers bear the greater tax burden than the buyers. O00arrow_forward5. LO 4 Suppose, as in the federal income tax code for the United States, that the representative con- sumer faces a wage income tax with a standard deduction. That is, the representative consumer pays no tax on wage income for the first x units of real wage income, and then pays a proportional taxt on each unit of real wage income greater than x Therefore, the consumer's budget constraint given by C wh -D + if wh- D=x., or C (1-wh-D+ tx+ if_wCh = D2 Now, suppose that the government reduces tax deduction x Using diagrams, determine the effects of this tax change on the consumer, and explain your results in terms of income and sub stitution effects. Make sure that you consider two cases. In the first case, the consumer does not pay any tax before x is reduced, and in the second case, the consumer pays a positive tax before x is reducedarrow_forward
- Which of the following is true? O A) budget deficit is an accumulation of all prior budget national debts B) budget deficit is an accumulation of all prior budget national debts minus national surpluses OO budget deficit and national debt are the same thing. D) national debt is an accumulation of all prior budget deficits minus budget surplusesarrow_forwardSuppose the government incurs more debt to finance new military spending. To what extent will this impose a burden on future generations? O a. Government spending on military is considered investment expenditure. O b. Military spending does not at all benefit the future generations. O c. Government spending crowds out private investment spending. O d. Government debt needed to finance military expenditures is held by domestic entities.arrow_forwardTable 27-1 Y- C+I-G C- s00 - 0.S(Y – T) I- 300 G- 700 T- 0.25Y Table 27-1 Y= C+I+G C- 500 - 0.S(Y-T) I- 300 G- 700 T- 0.25Y Refer to Table 27-1. What is the level of tax revenues in this model? O a. 437.5 O 0. 1,000 OC 945.5 O0.937.5 O e.950arrow_forward
- The figure shows government expenditure and revenue as a percentage of GDP, 1990-2019. During which of the following periods did the federal government run a budget surplus? 27.0% 25.0% -Expenditures 23.0% 21.0% 19.0% Receipts 17.0% 15.0% YEAR O 1998-2001 None of these answers is correct. O 2003-2008 2012-2018 PERCENT OF GDP 0661 1991 1993 1994 9661 2661 6661 0007 2002 2003 2005 9007 2008 6007 2011 2012 2014 2015 2017 2018arrow_forwardQuestion 16 The country of Opulencia loves to live large, but has a major debt problem. It has a national debt of $800 billion, $400 billion in intergovernmental borrowing, $160 billion in bonds held by domestic citizens, and $240 billion in bonds held by foreign citizens. Opulencia's public debt is equal to: O $400 billion O $640 billion O $960 billion O $1,200 billionarrow_forwardSuppose George made $20,000 last year and that he lives in the country of Harmony. The way Harmony levies income taxes, all citizens must pay 10 percent in taxes on their first $10,000 in earnings and then 50 percent in taxes on anything else they might earn. Given that George earned $20,000 last year, his marginal tax rate on the last dollar he earns will be rate for his entire income will be and his average tax O 10 percent; 50 percent O 50 percent; less than 50 percent O 10 percent; less than 50 percent O 50 percent; 50 percentarrow_forward
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