Holding other factors constant, if the income tax is replaced with a consumption tax so that...
Holding other factors constant, if the income tax is replaced with a consumption tax so that saving is not taxed, then the real interest rate will ______ and the equilibrium quantity of saving and investment will _______.
decrease; increase
increase; decrease
increase; not change
increase; increase
Homework Answers
Holding all the other factors constant, if the income tax is replaced with a consumption tax so that saving is not taxed, then the real interest rate will decrease and the equilibrium quantity of saving and investment will increase.
option(A)
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Holding other factors constant, if the income tax is replaced
with a consumption tax so that...
Holding constant the expected rate of return on all possible investment opportunities in the economy, a(n)
Holding constant the expected rate of return on all possible investment opportunities in the economy, a(n) A decrease in the real rate of interest will tend to decrease the level of investment. B increase in the real rate of interest will tend to increase the level of investment. C change in the real interest rate will have no impact on the level of investment. D decrease in the real rate of interest will tend to increase the level of investment
Exhibit: Saving, Investment, and the Interest Rate 1 Saving. S Real interest rate, Desired investment S...
Exhibit: Saving, Investment, and the Interest Rate 1 Saving. S Real interest rate, Desired investment S Saving investment The economy begins in equilibrium at point E, representing the real interest rate at which saving S; equals desired investment Is What will be the new equilibrium combination of real interest rate, saving, and investment if the government cuts spending, holding other factors constant? O point A O point O point D O point B
1. John is studying the effects of income on the demand for peppers. Which factors are...
1. John is studying the effects of income on the demand for peppers. Which factors are held constant when using the "ceteris paribus" assumption? income all factors affecting demand, except income all factors affecting demand, including income none of the above Only price could change the ceteris paribus. Change of income can affect demand. Do we disregard this in ceteris paribus? 2. If supply and demand shift simultaneously, the equilibrium price __________________. must decrease if the equilibrium quantity increases and...
Consider the long-run theory of investment, saving, and growth. For a given level of national income,...
Consider the long-run theory of investment, saving, and growth. For a given level of national income, a decrease in private consumption or government purchases will cause the equilibrium interest rate to Select one: a. increase and the flow of national saving to decrease. b. decrease and the flow of national saving to decrease. c. decrease and the flow of national saving to increase. O d. increase and the flow of investment to increase. O e. increase and the flow of...
Consider the long-run theory of investment, saving, and growth. For a given level of national income,...
Consider the long-run theory of investment, saving, and growth. For a given level of national income, a decrease in private consumption or government purchases will cause the equilibrium interest rate to Select one: a. increase and the flow of investment to decrease. о b. decrease and the flow of national saving to decrease. c. decrease and the flow of national saving to increase. d. increase and the flow of investment to increase. о e. increase and the flow of national...
An additional tax is assessed on Personal holding companies (PHC) if owners of a personal holding...
An additional tax is assessed on Personal holding companies (PHC) if owners of a personal holding company uses it to shelter investment income to be taxed at the corporate rate (21%) from their individual higher tax brackets and subject to the individual investment income surcharge. A PHC is defined as having over 60% of the adjusted ordinary gross income consisting of all of the following except: a. Business Income Net rent b. Royalties Dividends d Interest
QUICK CHECK multiple choice 1. Holding other things constant, an increase in the world interest rate...
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Holding demand constant, a decrease in supply will typically ___________ a. decrease equilibrium price but leave...
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тров Holding all other factors constant, an increase in imports would most likely cause total GDP...
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The term "crowding out" relates to the decrease in O A. consumption expenditure from an increase...
The term "crowding out" relates to the decrease in O A. consumption expenditure from an increase in investment B. the real interest rate from a government budget deficit C. private investment from a government budget deficit. O D. saving from an increase in disposable income. Click to select your answer.
Exhibit: Saving, Investment, and the Interest Rate 1 Saving. S Real interest rate, Desired investment S Saving investment The economy begins in equilibrium at point E, representing the real interest rate at which saving S; equals desired investment Is What will be the new equilibrium combination of real interest rate, saving, and investment if the government cuts spending, holding other factors constant? O point A O point O point D O point B
Consider the long-run theory of investment, saving, and growth. For a given level of national income, a decrease in private consumption or government purchases will cause the equilibrium interest rate to Select one: a. increase and the flow of national saving to decrease. b. decrease and the flow of national saving to decrease. c. decrease and the flow of national saving to increase. O d. increase and the flow of investment to increase. O e. increase and the flow of...
Consider the long-run theory of investment, saving, and growth. For a given level of national income, a decrease in private consumption or government purchases will cause the equilibrium interest rate to Select one: a. increase and the flow of investment to decrease. о b. decrease and the flow of national saving to decrease. c. decrease and the flow of national saving to increase. d. increase and the flow of investment to increase. о e. increase and the flow of national...
An additional tax is assessed on Personal holding companies (PHC) if owners of a personal holding company uses it to shelter investment income to be taxed at the corporate rate (21%) from their individual higher tax brackets and subject to the individual investment income surcharge. A PHC is defined as having over 60% of the adjusted ordinary gross income consisting of all of the following except: a. Business Income Net rent b. Royalties Dividends d Interest
QUICK CHECK multiple choice 1. Holding other things constant, an increase in the world interest rate increases which of the following? a. national saving and domestic investment b. national saving and the net capital outflow c. domestic investment and the net capital outflow d. national saving only 2. An appreciation of a nation's currency can be the result of which of the following? a. an increase in net exports b. a decrease in net exports c. a fall in national...
тров Holding all other factors constant, an increase in imports would most likely cause total GDP to A. decrease B. remain the same C increase D. All of the above E. None of the above
The term "crowding out" relates to the decrease in O A. consumption expenditure from an increase in investment B. the real interest rate from a government budget deficit C. private investment from a government budget deficit. O D. saving from an increase in disposable income. Click to select your answer.
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