Suppose a tax is such that an individual with an income of $10,000 pays $2,500 of tax, a person with an income of $20,000 pays $5,000 of tax, a person with an income of $30,000 pays $7,500 of tax, and so forth. Instructions: Enter your answers rounded to 1 decimal place. a. What is each person's average tax rate? Income Таx Paid Average Tax Rate $ 10,000 $ 2,500 20,000 5,000 30,000 7,500 %

Q: Y= C+lo+Go C= a +b(Y-T) , (a>0, 0o, 0<t<1) Identify the types of variables and equations. Use…

A: There are 2 kinds of variables in these equations. The variables Y,C, T are the variables that are…

Q: 2. Changes in taxes The following graph shows the aggregate-demand curve. Shift the aggregate-demand…

A: The aggregate demand curve addresses the all out amount of all labor and products requested by the…

Q: Which curve shifts and in which direction when the following events occur in the tax accounting…

A: a) Answer:- Demand increases. Explanation:- On tax day, ever more individual are going to look to…

Q: In an economy such that: C = 200 + 0.80 (Y- T) I=40 - 20 R X 30 - 0.05 Y T= 100 M =0.20 Y- 10 R M =…

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Q: What can you say about Tax incidence in your country, who carries the burden more? Give examples and…

A: Taxes are unintended fees placed on individuals or companies and levied by a government agency –…

Q: The formula for the tax multiplier is Select one: O a. -MPC/(MPC + 1). O b. MPC/ (1 MPC). O c. 1/(1-…

A: Tax multiplier assumes that a change in tax would affect the consumption, keeping everything else…

Q: Explain very briefly what you understand from income effect and substitution effects of change in…

A: We will answer the first question only. Please resubmit the other question separately in case you…

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A: This is explained by the permanent income hypothesis which implies that people will spend money…

Q: Congress and the president carry out fiscal policy through changes in O interest rates and the money…

A: Answer to the question is as follows:

Q: 15. If consumers in a country spend 3/4 of their disposable income. If their government increases…

A: MPC=34MPC=0.75

Q: In 2016, the city of Canfield collected $500,000 in taxes and spent $450,000. In 2016, the city of…

A: An economy's budget is said to be in surplus when it collects more revenue than it spends, while…

Q: c. If the government spending multiplier is 5, what is the tax multiplier? d. If the tax multiplier…

A: Government Spending Multiplier is 5 Government Spending multiplier =1 (1-MPC)=5 Therefore, MPC = 45…

Q: plain using

A: Price elasticity of demand measures the change in consumption of a product with respect to a change…

Q: overnments use taxes to raise revenue. If governments increase the tax rate, is this uaranteed to…

A: Tax revenue is product of size of tax and the quantity sold at this taxed price.

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A: The government influences the amount of discretionary income available to households by raising or…

Q: Illustrate each of the following situations with a graph showing IS curve: a. An increase in…

A: The IS curve slopes downward from left to right because as the interest rates falls, investment…

Q: The formula for the tax multiplier is Select one: O a. -MPC/(MPC+ 1). O b. MPC/ (1 + MPC). O c.…

A: Tax multiplier refers to the amount of tax multiplied or increased out of the fiscal policy…

Q: II. Illustrate cach of the following situations with a graph showing IS curve: a. An increase in…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Why is the tax multiplier smaller than the government spending multiplier?

A: In a market, the government has two ways to influence the behavior of market factors. It may change…

Q: suppose the government wishes to illuminate recess or a gap of 100 billion in the MPC is .075 how…

A: Given, Gap = 100 billion MPC = .075

Q: Suppose you earn $40,000 per year and pay taxes based on marginal taxX rates. The first tax bracket,…

A: Income tax is that type of tax which is imposed by government on the income of individuals &amp;…

Q: Algebraically derive the government spending and tax multiplier for the case in which tax revenues…

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A: The proportional amount of rising or reduction in the final revenue arising from the investment…

Q: Identify whether each of the following taxes is progressive or regressive and indicate in each case…

A: 1. The Federal Personal Income tax is” progressive, and the incident is on the taxpayer” As income…

Q: Expansionary fiscal policy include Select one: O a. an increase in net taxes O b. an increase in…

A: Meaning of Fiscal Policy: The term fiscal policy refers to the situation, under which the…

Q: 5. If consumers in a country spend 3/4 of their disposable income. If their government increases its…

A: Aggregate demand refers to the overall demand for goods and services in an economy. The aggregate…

Q: Consumer saves 15% of additional income, spends 65% of income on goods and services and spends 20%…

A: The tax multiplier can be calculated by using the following formula.

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A: The government revenue is what it earns through its taxes. The government expenditure is what it…

Q: Derive multiplier for a change in the government purchase and the taxes. Why is the tax multiplier…

A: Government multiplier is the ratio of change in income and change in government expenditure. Whereas…

Q: 16) What is the first signal that policy makers may need to examine expansionary fiscal economic…

A: Expansionary fiscal policy : Due to increment in government expenditure , there will be increase in…

Q: 17 of 25 If the federal government increases govemment spending to increase aggregate demand and…

A: Sometimes higher government spending lowers consumption spending and investment spending.

Q: 7. Algebraically derive the government spending and tax multiplier for the case in which tax…

A: Government spending multiplier: At equilibrium, AD = AS Y = C + I + G + NX C = C0 + MPC(Y — T) C0 =…

Q: Fill in the missing numbers on the chart. Then tell me where we are operating on the Planned AE/RGDP…

A: RGDP Tax DI C S I G X-M Planned AE Chg in Inv 5 1 4 3.7 0.3 1 0.8 -0.5 5 - 5.5 1 4.5 4.1 0.4 1.1…

Q: Figure 4-11 LAFFER CURVE 100 в Tax Revenue Refer to Figure 4-11. On the Laffer curve shown, tax…

A: The Laffer curve illustrates the relationship between the tax rate imposed by the government and the…

Q: C. Identify and explain what the spending and tax multipliers d. Explain why a change in taxes and a…

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Q: What happens to the tax revenue when the tax on a good increase gradually? (a) Will rise (b) Will…

A: Tax Revenue:- Earnings received through profit and revenue taxation, benefit payments, taxes on…

Q: 16. If consumers in a country spend 4/5 of their disposable income. If their government decreases…

A: Aggregate demand is the entire demand for all completed products and services produced in a given…

Q: Suppose there is a bill to increase the tax on cigarettes by $1 per pack coupled with an income tax…

A: When the price of a good increase, its quantity demanded decreases. The imposition of tax leads to…

Q: Question: Solve for the equilibrium level of output in the following two scenarios: there isan…

A: Y=−5+0.5(Y−250−0.1Y)+200+300+50'

Q: If the federal government has a budget surplus, then it is definitely the case that revenues are…

A: Government collects taxes in order to maintain public expenditure.

Q: he data below is for the small economy of Christodea in 2015. Consumption: C = 500 + 0.75Y, Net…

A: Investment multiplier = (1 / 1 - MPC) = (1/ 1- 0.75) = 4 a) So, for government to decrease…

Q: a) Explain very briefly what you understand from income effect and substitution effects of change in…

A: A tax that is being imposed on entities or individuals with respect to the profits or income being…

Q: Suppose government spending and lump sum taxes are both reduced by $150 billion. As a result, GDP…

A: A fall in lump sum will increase in the disposable income and the consumption spending of the…

Q: Suppose a tax is such that an individual with an income of $10,000 pays $2,000 of tax, a person with…

A: Taxes is the compulsory payment levied on the citizens by the government. The tax is said to be…

Q: How does tax affect AE line? Draw graphs to explain

A: Aggregate expenditure is composed of consumption spending, investment spending, government purchases…

Q: Suppose that in 2012 the government collected $320 billion in revenue and spent $380 billion, while…

A: Additional deficit on 2012 =$320- $380= -$60 billion