Permanent income tax cuts tend to have a greater impact on current consumption than temporary tax...
Permanent income tax cuts tend to have a greater impact on current consumption than temporary tax cuts because permanent tax cuts affect---------- than temporary tax cuts
1. expectations about unemployment rates more
2. the government's debt positions less
3. expectations about long-run income prospects more
4. market liquidity ( money supply) less
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Permanent income tax cuts tend to have a greater impact on
current consumption than temporary tax...
International per capita GDP comparisons are misleading when countries involved differ greatly in the percentage of...
International per capita GDP comparisons are misleading when countries involved differ greatly in the percentage of economic activity that is transacted in organized markets. 1) Why is it? Why do permanent tax cuts have a greater impact on consumption than temporary tax cuts? Permanent tax cuts affect expectations of long-run income more than temporary tax cuts. 2) Tell me more details why.
Using the neoclassical model of consumption, an implication of the permanent-income hypothesis is 38. because a. co...
Using the neoclassical model of consumption, an implication of the permanent-income hypothesis is 38. because a. consumption smoothing; of diminishing marginal utility b. that permanent income follows a random walk; of aggregate demand shocks c. that wealth is constant; real interest rates are, more or less, constant d. a low discount factor; of the borrowing constraint e. no borrowing; income in the future is higher and the firm will A decline in the cororte income tax will a. raise the...
Question 25 (2.5 points) Which of the following would cause a downward shift in the consumption...
Question 25 (2.5 points) Which of the following would cause a downward shift in the consumption function? a tax decrease an increase in wealth a stock market crash a decrease in the price level expectations of higher future income Question 26 (2.5 points) According to supply-side economists, the by curve will shift to the caused AD; right; more investment AD; left; more saving AS; right; more investment AS; left; more saving money supply; right; lower interest rates Question 28 (2.5...
1. Explain what will happen to the price level real GDP and the unemployment rate in...
1. Explain what will happen to the price level real GDP and the unemployment rate in the following cases: a. AD falls by the same amount that SRAS rises b. AD falls by less than SRAS rises c. AD falls by more than SRAS falls d. AD falls by the same amount that SRAS falls e. AD falls by less than SRAS falls 2. Explain how expectations about future sales will affect investment. 3. How will a change in the...
revellus the government's expenses are greater than its Correct. A federal deficit occurs when a government's...
revellus the government's expenses are greater than its Correct. A federal deficit occurs when a government's expenses are more than its tax revenues. The government tries to control its deficit either by borrowing or by printing money. See 5-4: Other Factors That Influence Interest Rate Levels the money supply in the market decreases 0/1 pts Incorrect Question 45 Which of the following is true of federal deficit? Other things held constant, the larger the federal deficit, the lower the level...
Please do all Thank you 7. Given the expected rate of return on all possible investment...
Please do all
Thank you
7. Given the expected rate of return on all possible investment opportunities in the economy, a(n) B. decrease in the real rate of interest will tend to increase the level of investment. C. decrea A. increase in the real rate of interest will tend to increase the level of investment. se in the real rate of interest will tend to decrease the level of investment. D. change in the real interest rate will have no...
1. An economy's unemployment rate is at 5%. A recession starts after there is a drop...
1. An economy's unemployment rate is at 5%. A recession starts after there is a drop in business investments, which leads to a 4% rise in unemployment. After many months, the unemployment rate goes by to 5%. What explains the drop in unemployment? a)Spending multiplier b)the money multiplier c)The natural rate hypothesis d)menu costs e)Permanent income hypothesis. 2. Suppose consumption expenditures in Japan can be modeled by the equation: C = ¥50 trillion + 0.8 Yd, where Yd is aggregate...
a. Which of the following events would likely cause the decrease in aggregate demand? Personal consumption...
a. Which of the following events would likely cause the decrease
in aggregate demand?
Personal consumption falls as workers become concerned about
future employment prospects.
Imports decrease due to increased foreign prices.
Gross investment increases as capital units become fully
utilized.
b. A decrease in aggregate demand is of policy concern due to
the increase in the:
unemployment rate.
productivity of workers.
price level.
c. Which policy action should the federal government enact?
Increase personal income tax rates
Decrease real...
12. The progressive income tax and transfer payments are the two main: A) automatic stabilizers. B)...
12. The progressive income tax and transfer payments are the two main: A) automatic stabilizers. B) monetary policy tools. C) long-run aggregate supply management tools. D) tools for balancing the budget. 13. Automatic stabilizers include all of the following EXCEPT: A) unemployment compensation benefits. B) welfare payments. C) national defense spending. D) tax revenues. 14. The implementation lag is: A) usually less than 12 months. B) the time it takes policymakers to recognize a problem. C) the time it takes...
11. The goals of optimal income taxation include all of the following EXCEPT: a. maximizing tax...
11. The goals of optimal income taxation include all of the following EXCEPT: a. maximizing tax revenue. b. minimizing the distortions due to taxation. c. maximizing the nation's social welfare function. d. achieving vertical equity. 12. Suppose that the elasticities of demand for apples, bananas, and peaches are –0.9, –1.6, and –0.8, respectively. Assume that all else is identical in these three products and that an identical tax is levied on each good. Rank the products from highest to lowest...
Using the neoclassical model of consumption, an implication of the permanent-income hypothesis is 38. because a. consumption smoothing; of diminishing marginal utility b. that permanent income follows a random walk; of aggregate demand shocks c. that wealth is constant; real interest rates are, more or less, constant d. a low discount factor; of the borrowing constraint e. no borrowing; income in the future is higher and the firm will A decline in the cororte income tax will a. raise the...
Question 25 (2.5 points) Which of the following would cause a downward shift in the consumption function? a tax decrease an increase in wealth a stock market crash a decrease in the price level expectations of higher future income Question 26 (2.5 points) According to supply-side economists, the by curve will shift to the caused AD; right; more investment AD; left; more saving AS; right; more investment AS; left; more saving money supply; right; lower interest rates Question 28 (2.5...
revellus the government's expenses are greater than its Correct. A federal deficit occurs when a government's expenses are more than its tax revenues. The government tries to control its deficit either by borrowing or by printing money. See 5-4: Other Factors That Influence Interest Rate Levels the money supply in the market decreases 0/1 pts Incorrect Question 45 Which of the following is true of federal deficit? Other things held constant, the larger the federal deficit, the lower the level...
Please do all
Thank you
7. Given the expected rate of return on all possible investment opportunities in the economy, a(n) B. decrease in the real rate of interest will tend to increase the level of investment. C. decrea A. increase in the real rate of interest will tend to increase the level of investment. se in the real rate of interest will tend to decrease the level of investment. D. change in the real interest rate will have no...
a. Which of the following events would likely cause the decrease
in aggregate demand?
Personal consumption falls as workers become concerned about
future employment prospects.
Imports decrease due to increased foreign prices.
Gross investment increases as capital units become fully
utilized.
b. A decrease in aggregate demand is of policy concern due to
the increase in the:
unemployment rate.
productivity of workers.
price level.
c. Which policy action should the federal government enact?
Increase personal income tax rates
Decrease real...
12. The progressive income tax and transfer payments are the two main: A) automatic stabilizers. B) monetary policy tools. C) long-run aggregate supply management tools. D) tools for balancing the budget. 13. Automatic stabilizers include all of the following EXCEPT: A) unemployment compensation benefits. B) welfare payments. C) national defense spending. D) tax revenues. 14. The implementation lag is: A) usually less than 12 months. B) the time it takes policymakers to recognize a problem. C) the time it takes...
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