The multiplier with a proportional income tax answer the, Ask an Expert

Economics

(The Multiplier with a Proportional Income Tax) Answer the following questions using the following data, all in billions. Assume an MPC of 0.8.

Disposable Income Consumption

$ 0	$ 500
500	900
1,000	1,300
1,500	1,700

a. Assuming that net taxes are equal to $200 billion regardless of the level of income, graph consumption against income (as opposed to disposable income).

b. How would an increase in net taxes to $300 billion affect the consumption function?

c. If the level of taxes were related to the level of income (i.e., income taxes were proportional to in- come), how would this affect the consumption function?

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M91719949

Have any Question?Write your Review or question?

Related Questions in Microeconomics

Question how does a franchise contract in which the parent

Question: How does a franchise contract in which the parent company supplies ingredients to a franchise holder reallocate risk between the parties, as opposed to the situation faced by a non-franchise business and its sp ...

Question it is sometimes asserted that the welfare system

Question: It is sometimes asserted that the welfare system creates a form of intergenerational "dependency." That is, children born into households that receive welfare will themselves become more apt to receive welfare ...

Question - the federal government recently decided to raise

Question - The federal government recently decided to raise the excise tax on hard liquor. a. Graphically illustrate the effects of this tax on the market for hard liquor. b. Would a $1 increase in the excise tax on liqu ...

Question - a firm is considering moving its manufacturing

Question - A firm is considering moving its manufacturing plant from USA to a new location in Qatar. The Industrial Engineering Department was asked to identify the various alternatives to relocate the plant. The enginee ...

Question why would economists use the term deadweight loss

Question: Why would economists use the term deadweight loss to describe the impact on consumer surplus and producer surplus from a price control? The response must be typed, single spaced, must be in times new roman font ...

Question a quasi-option value question imagine that the net

Question: A Quasi-option value question: Imagine that the net present value of a hydroelectric plant with a life of 75 years is $24 million and that the net present value of a thermal electric plant with a life of 40 yea ...

Suppose that demand and supply schedules are given

Suppose that demand and supply schedules are given by: Price Quantity Dem Quantity Supp $ 0 21 0 $1 18 4 $2 15 8 $3 12 12 $4 9 16 $5 6 20 $6 3 24 $7 0 28 At a price of $4, there would be a ____________ of the good. A. s ...

Question please thoroughly and completely explain the

Question: Please thoroughly and completely explain the differences between transaction demand for money and the asset demand for money, and how they work together to determine the total demand for money. The response mus ...

Question - present value application is it possible to

Question - Present value Application: Is it possible to retire on income we invest by foregoing a daily cup of gourmet coffee? At a price of $4.25 per cup, the cup-a-day Starbucks latte drinker is spending $1551.25 per y ...

Question in an effort to reduce energy costs a major

Question: In an effort to reduce energy costs, a major university has installed more efficient lights as well as automatic sensors that turn the lights off when no movement is present in a room. Historically, the cost of ...

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

Recent Questions

Ask Microeconomics Expert