This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose that the MPC out of disposable income was 0.8 and the tax function for a given economy was T ... (Read 183 times)

Jramos095

  • Hero Member
  • *****
  • Posts: 528
on: Jun 30, 2018
Suppose that the MPC out of disposable income was 0.8 and the tax function for a given economy was T =  30 + 0.25Y.
 
  An increase in the intercept of the tax function of 10 units (from  30 to  20) would cause equilibrium income in the simple Keynesian model to fall by a. -20 units.
  b. 10 units.
  c. 20 units.
  d. 40 units.

Question 2

According to real business cycle theory, an increase in taxes
 
  a. would significantly reduce labor supply, increase employment, and decrease output.
  b. a decline in employment but not in output.
  c. would significantly reduce labor supply, and decrease employment and output.
  d. no change in output and employment.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

firehawk60

  • Sr. Member
  • ****
  • Posts: 315
Reply #1 on: Jun 30, 2018
Answer to Question 1

C

Answer to Question 2

C


Jramos095

  • Hero Member
  • *****
  • Posts: 528
Reply #2 on: Jun 30, 2018
Correct answers!


firehawk60

  • Sr. Member
  • ****
  • Posts: 315
Reply #3 on: Jun 30, 2018
Great! Please up vote :D


« previous next »
 

Did you know?

On average, someone in the United States has a stroke about every 40 seconds. This is about 795,000 people per year.

Did you know?

More than 2,500 barbiturates have been synthesized. At the height of their popularity, about 50 were marketed for human use.

Did you know?

Approximately one in four people diagnosed with diabetes will develop foot problems. Of these, about one-third will require lower extremity amputation.

Did you know?

More than 30% of American adults, and about 12% of children utilize health care approaches that were developed outside of conventional medicine.

Did you know?

A seasonal flu vaccine is the best way to reduce the chances you will get seasonal influenza and spread it to others.

Probability of Major Depression as a Function of 5-HTT Allele and Levels of Maltreatment ... Probability of Major Depression as a Function of 5-HTT Allele and Levels of Maltreatment ...
Creating a Continental Economy Creating a Continental Economy
Determination of Income Inequality Determination of Income Inequality
State the transformations on the function f(x)= 4sin(x-pi)-2 and then graph two cycles below. State the transformations on the function f(x)= 4sin(x-pi)-2 and then graph two cycles below.
Look at the graph function shown belowPlea Look at the graph function shown belowPlea
Discrete random variables- Probability Distribution Function Discrete random variables- Probability Distribution Function
Video: Structures that affect circulation - venous return

For a complete list of videos, visit our video library