Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Economics Expert

The basics of Macro Economics- Spending Multiplier, Aggregate demand, and Laffer curve.

1) When households' marginal propensity to consume (MPC) increases, the size of the spending multiplier:

1. decreases.

2. remains unchanged.

3. also increases.

4. reacts unpredictably.

2) According to the Laffer Curve, when the tax rate is 100 percent, tax revenue will be:

1. at the maximum value.

2. greater than it would be at a 50 percent tax rate.

3. the same as it would be at a 20 percent tax rate.

4. 0.

5. the same as it would be at a 50 percent tax rate.

3) Which of the following statements is true?

1. The presence of the automatic stabilizers tends to destabilize the economy.

2. To combat inflation, Keynesians recommend lower taxes and greater government spending.

3. A reduction in tax rates along the downward-sloping portion of the Laffer curve would increase tax revenues.

4. According to supply-side fiscal policy, lower tax rates would shift the aggregate demand curve to the right, expanding the economy and creating some inflation.

4) The Laffer curve shows as tax rates rise, tax revenue:

1. first rises, then falls, and then rises again.

2. first rises, and then falls.

3. rises.

4. remains at a constant level.

5. falls.

5) Assume Congress enacts a $10 billion increase in spending and a $10 billion tax increase to finance the additional government spending. The result of this balanced-budget approach is a:

1. $20 billion increase in aggregate demand.

2. $10 billion decrease in aggregate demand.

3. $10 billion increase in aggregate demand.

4. $100 billion increase in aggregate demand.

6) Which of the following is not an automatic stabilizer?

1. Corporate income tax revenue.

2. Personal income tax revenue.

3. Unemployment compensation benefits.

4. Property tax revenue.

7) The ratio of the change in GDP to an initial change in aggregate spending is the:

1. marginal propensity to consume.

2. marginal expenditure rate.

3. permanent income rate.

4. spending multiplier.

8) A $10 million increase in government spending has the same economic impact as a $10 million tax cut.

1. False

2. True

9) As the marginal propensity to consume (MPC) increases, the spending multiplier:

1. decreases.

2. becomes undefinable.

3. increases.

4. remains constant.

10) Illustrate which of the following countries devote the smallest percentage of its GDP to taxes?

1. Germany.

2. The United States.

3. The United Kingdom.

4. Sweden.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M920791

Have any Question? 


Related Questions in Business Economics

Assignment -consider the following cobb douglas production

Assignment - Consider the following Cobb Douglas production function where Y is maize output, X 1 is labour input, and X 2 is the capital. Data for estimating this equation is given in the Table below. Y = β 0 X 1i β_1 X ...

Free trade and restricted trade - benefits and cost1-2

Free Trade and Restricted Trade - Benefits and Cost 1-2 paragraphs APA format/ no plagarism Using your own words, define both free and restricted trade. What do you feel are the benefits and the cost to having free trade ...

In the united states as in most countries we value the

In the United States, as in most countries, we value the benefits of a free and competitive market. This suggests an interesting question: what if there were to be no Antitrust laws or other regulations on business activ ...

1 there is a small country whose domestic demand and supply

1) There is a small country whose domestic demand and supply for a good x are given below (where P is the price of X) [drawing a demand and supply graph may be helpful to you, but is not required.] D: P=100-Q S: P=10+2Q ...

Assignmentinstructions1 select an illegal activity and

Assignment Instructions 1. Select an illegal activity and transform/mask its' true purpose with the disguise of a legitimate business operation. In other words, create a start-up business that would be viewed as a legal ...

Allocation and allotments please respond to the following1

"Allocation and Allotments" Please respond to the following: 1. From the first e-Activity, examine and evaluate the disparity of Georgia budget allocation for education and property tax to the various localities. Based o ...

1what is the production possibilities curve and how is it

1. What is the production possibilities curve and how is it useful? 2. What 4 factors contribute to determining any point in this model? 3. How would we apply this framework to the real world? 4. You are planning to expa ...

Question 1 for the following situations calculate

Question 1 . For the following situations, calculate elasticity of demand and comment on the answer.                             When the price of commodity X was Rs. 12/-, 40 units it were demanded. When the price decre ...

Cite the sources used to answer this question provide the

Cite the source(s) used to answer this question. Provide the source(s) below your response and apply APA guidelines for references. 1) Class, is it possible for a business to show an accounting profit, but actually earn ...

Assignmentarticle reportplease select a marketing topic you

Assignment Article Report Please select a marketing topic you learned and then search in the Wall Street Journal (either online or hardcopy *) and select an article about that topic within the last 12 months. To do this, ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro