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 193 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?

Before a vaccine is licensed in the USA, the Food and Drug Administration (FDA) reviews it for safety and effectiveness. The CDC then reviews all studies again, as well as the American Academy of Pediatrics and the American Academy of Family Physicians. Every lot of vaccine is tested before administration to the public, and the FDA regularly inspects vaccine manufacturers' facilities.

Did you know?

Dogs have been used in studies to detect various cancers in human subjects. They have been trained to sniff breath samples from humans that were collected by having them breathe into special tubes. These people included 55 lung cancer patients, 31 breast cancer patients, and 83 cancer-free patients. The dogs detected 54 of the 55 lung cancer patients as having cancer, detected 28 of the 31 breast cancer patients, and gave only three false-positive results (detecting cancer in people who didn't have it).

Did you know?

The people with the highest levels of LDL are Mexican American males and non-Hispanic black females.

Did you know?

Persons who overdose with cardiac glycosides have a better chance of overall survival if they can survive the first 24 hours after the overdose.

Did you know?

The use of salicylates dates back 2,500 years to Hippocrates's recommendation of willow bark (from which a salicylate is derived) as an aid to the pains of childbirth. However, overdosage of salicylates can harm body fluids, electrolytes, the CNS, the GI tract, the ears, the lungs, the blood, the liver, and the kidneys and cause coma or death.

North America and the Global Economy North America and the Global Economy
Testing motor function of cranial nerve VII - Close both eyes Testing motor function of cranial nerve VII - Close both eyes
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.
Discrete random variables- Probability Distribution Function Discrete random variables- Probability Distribution Function
Calculus help: Find a cubic function f (x) = ax3 +bx2 +cx+d that has a local maximum value of 3 ... Calculus help: Find a cubic function f (x) = ax3 +bx2 +cx+d that has a local maximum value of 3 ...
Creating a loss-of-function CFTR Creating a loss-of-function CFTR
Video: Cellular defenses (natural killer cells, phagocyte types & process of phagocytosis)

For a complete list of videos, visit our video library