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Suppose the marginal propensity to consume is 0.81. What is the tax multiplier?
-
0.19
-
0.23
-
-4.26
-
-0.19
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- If the MPC is 0.9, then the tax multiplier is a. -0.1 b. -1.11 c. -9 d. -10Calculate the government spending and tax multipliers for each income bracket, considered separately. MPC Tax Multiplier Income/spending Multiplier Household income 0-$30,000 $31,000-50,000 $51,000-80,000 $80,000 and above 0.9 0.8 0.75 0.6If the MPC is 0.75, the tax multiplier is Group of answer choices -1.666. -1. -3. -2.5
- Calculate the government spending multiplier and the tax multiplier if the MPC is 0.6. Show your workSuppose the MPC is 0.8. What is the tax multiplier in this economy? If the government were to lower taxes by $250 in this economy how much would Total Spending change as a result? Show your work.What would it take to convert a sales tax into a true consumption tax? Senator Smith has suggested that the U.S. federal income tax is a more efficient form of tax than the Texas sales tax. What are the arguments for and against this position?
- Why is the tax multiplier smaller than the government spending multiplier?The government lowers $0.9 trillion in taxes, restoring GDP from $10 trillion to its potential level of $11.2 trillion. What is the value of the tax multiplier? A -1.33 B -0.9 C -0.75 D -1 E -1.2Explain carefully why the tax multiplier is negative and why it is smaller in absolute value than the government expenditure multiplier.
- Suppose the tax multiplier in an economy is -8. If the government wants to lower total spending (TS) by $8000 what should they do to Taxes (T)? Group of answer choices a. they should increase taxes by $64000 b. they should decrease taxes by $64000 c. they should increase taxes by $1000 d. they should decrease taxes by $1000A. If your MPC = 0.6 and government spending (G) increases by $800. What will happen to the equilibrium income? The Effect of Taxation: Tax Multiplier = -MPC X Spending Multiplier Problems: B. If the MPC = 0.8 and taxes go up by $1000, what will happen to the equilibrium income? Please fully complete both problems.Suppose that real GDP for an economy is currently 16,000 billion, the government purchases multiplier is 2.2 and the tax multiplier is -1.2. If the government deploys additional spending of 600 billion and cuts taxes by 120 billion, where will GDP end up (in billion)?
