What would happen to the US Economy's Inflation Rate (%) if the Individual Tax Rate for...
What would happen to the US Economy's Inflation Rate (%) if the
Individual Tax Rate for Households was reduced by 5-10% in the
short run
The Inflation Rate does not change
The Inflation Rate would Increase
The Inflation Rate would Decrease
Homework Answers
Answer : The answer is option B.
Cutting tax increase the income of households. As a result, the aggregate demand increase. This shift the aggregate demand curve to rightward. As a result of this, the inflation rate increase. Therefore, option B is correct.
Add Answer to:
What would happen to the US Economy's Inflation Rate (%) if the
Individual Tax Rate for...
Compared with higher inflation rates, a lower inflation rate will (Increase or Decrease?) the after-tax real...
Compared with higher inflation rates, a lower inflation rate
will (Increase or Decrease?) the after-tax real
interest rate when the government taxes nominal interest income.
This tends to (Encourage or Discourage?) saving,
thereby (Increasing or Decreasing) the quantity of
investment in the economy and (Increasing or Decreasing) the
economy's long-run growth rate.
Attempts: Keep the Highest: /2 8. Inflation-induced tax distortions Jacques receives a portion of his income from his holdings of interest-bearing government bonds. The bonds offer a real...
42 Assume that there is no unanticipated inflation and that wages and prices are flexible. What...
42 Assume that there is no unanticipated inflation and that wages and prices are flexible. What will happen to short run real gross domestic product (RGDP) and the price level in the long run if the Federal Reserve purchases government securities in the open market? RGDP 10] Price Level 2 (A) Decrease 2 Decreased (B) No change Increase of GA () (C) No change Decrease CAO (D) Increase A No change 2 ) (E) Increase Increase 2A (5)
8. In general, if an allele gave an individual a survival advantage, what would happen to...
8. In general, if an allele gave an individual a survival advantage, what would happen to its frequency over time? (Increase or decrease) Explain. (2 marks) 9. In general, if an allele gave an individual a survival disadvantage, what would happen to its frequency over time? (Increase or decrease) Explain. (2 marks)
Suppose the short run Phillips Curve is given by: Inflation = Expected Inflation +.2 -4*Unemployment Rate...
Suppose the short run Phillips Curve is given by: Inflation = Expected Inflation +.2 -4*Unemployment Rate Assume that initially, people expect zero inflation. Draw the short run Phillips Curve and the long run Phillips Curve on a graph On the graph, represent what would happen in the short run if the government decided to run 4% inflation (setting inflation =0.04). . On the graph, represent what would happen in the long run if the government decided to run 4% inflation.
3. According to macroeconomists, what would happen if a higher inflation rate becomes embedded in the...
3. According to macroeconomists, what would happen if a higher inflation rate becomes embedded in the economy (i.e., people believe they live in a world of high inflation)? Also, what would happen if a lower inflation rate becomes embedded in the economy?
The graph below depicts an economy where an increase in aggregate demand has caused inflation. The...
The graph below depicts an economy where an increase in aggregate demand has caused inflation. The economy's current level of real GDP (Y2) is above its long-run equilibrium. This is illustrated by the long-run aggregate supply curve (LRAS) and a price level (P2) above the equilibrium value of Pe Fiscal Policy LRAS AS AD. 1 Real GDP Which of the following is an example of an automatic stabilizer that would help this economy move toward fll employment again? A reduction...
b) (2 points) What is the difference between nominal interest rate and real interest rate? Does...
b) (2 points) What is the difference between nominal interest rate and real interest rate? Does the central bank control the real or the nominal rate? What do we assume in our model? Financial Frictions in the short run model a) (2 points) What do you expect would happen to the economy when spreads increase? Specifically, what would happen to output and inflation during the period of the increase in spreads? b) (2 points) How do you think would the...
7. What would happen if the government decides to issue inflation-protected securities? A. The demand for...
7. What would happen if the government decides to issue inflation-protected securities? A. The demand for money will decrease. B. The demand for money will increase. C. The government will balance the decrease in the demand for money. D. There is not enough information provided to answer the question.
Suppose the short run Phillips Curve is given by: Inflation = Expected Inflation + 0.2 -...
Suppose the short run Phillips Curve is given by: Inflation = Expected Inflation + 0.2 - 4*Unemployment Rate Assume that initially, people expect zero inflation. a)Draw the short run Phillips Curve and the long run Phillips Curve on a graph b)On the graph, represent what would happen in the short run if the government decided to run 4% inflation (setting inflation =0.04). c)On the graph, represent what would happen in the long run if the government decided to run 4%...
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...
Compared with higher inflation rates, a lower inflation rate
will (Increase or Decrease?) the after-tax real
interest rate when the government taxes nominal interest income.
This tends to (Encourage or Discourage?) saving,
thereby (Increasing or Decreasing) the quantity of
investment in the economy and (Increasing or Decreasing) the
economy's long-run growth rate.
Attempts: Keep the Highest: /2 8. Inflation-induced tax distortions Jacques receives a portion of his income from his holdings of interest-bearing government bonds. The bonds offer a real...
42 Assume that there is no unanticipated inflation and that wages and prices are flexible. What will happen to short run real gross domestic product (RGDP) and the price level in the long run if the Federal Reserve purchases government securities in the open market? RGDP 10] Price Level 2 (A) Decrease 2 Decreased (B) No change Increase of GA () (C) No change Decrease CAO (D) Increase A No change 2 ) (E) Increase Increase 2A (5)
8. In general, if an allele gave an individual a survival advantage, what would happen to its frequency over time? (Increase or decrease) Explain. (2 marks) 9. In general, if an allele gave an individual a survival disadvantage, what would happen to its frequency over time? (Increase or decrease) Explain. (2 marks)
Suppose the short run Phillips Curve is given by: Inflation = Expected Inflation +.2 -4*Unemployment Rate Assume that initially, people expect zero inflation. Draw the short run Phillips Curve and the long run Phillips Curve on a graph On the graph, represent what would happen in the short run if the government decided to run 4% inflation (setting inflation =0.04). . On the graph, represent what would happen in the long run if the government decided to run 4% inflation.
3. According to macroeconomists, what would happen if a higher inflation rate becomes embedded in the economy (i.e., people believe they live in a world of high inflation)? Also, what would happen if a lower inflation rate becomes embedded in the economy?
The graph below depicts an economy where an increase in aggregate demand has caused inflation. The economy's current level of real GDP (Y2) is above its long-run equilibrium. This is illustrated by the long-run aggregate supply curve (LRAS) and a price level (P2) above the equilibrium value of Pe Fiscal Policy LRAS AS AD. 1 Real GDP Which of the following is an example of an automatic stabilizer that would help this economy move toward fll employment again? A reduction...
b) (2 points) What is the difference between nominal interest rate and real interest rate? Does the central bank control the real or the nominal rate? What do we assume in our model? Financial Frictions in the short run model a) (2 points) What do you expect would happen to the economy when spreads increase? Specifically, what would happen to output and inflation during the period of the increase in spreads? b) (2 points) How do you think would the...
7. What would happen if the government decides to issue inflation-protected securities? A. The demand for money will decrease. B. The demand for money will increase. C. The government will balance the decrease in the demand for money. D. There is not enough information provided to answer the question.
Most questions answered within 3 hours.
-
In one statistics class, students were given one homework
assignment. The professor asked students to find...
asked 8 minutes ago -
(a) Calculate the force needed to bring a 1050 kg car to rest
from a speed...
asked 7 minutes ago -
A box contains 14 large marbles and 19 small marbles. Each
marble is either green or...
asked 24 minutes ago -
The results of a one-sample t test were t (18) = 2.11,
p < 0.05. In...
asked 34 minutes ago -
What kind of share-based compensation does the company have for
Verizon? What was compensation expense for...
asked 42 minutes ago -
Place each of the following transactions in one of the four
components of expenditure: (remember it...
asked 50 minutes ago -
Find the optimal binary symbol code using the Huffman coding
algorithm. Draw the Huffman tree (show...
asked 53 minutes ago -
Using Rhodes Corporation’s financial statements (shown after
part f), answer the following questions.
a. What is...
asked 53 minutes ago -
Viewers of the ABC news segment may use ___________ to make
generalization about what the individual...
asked 1 hour ago -
Which of the following captures Locke’s response to Hobbes on
the issue of the enforcement of...
asked 1 hour ago -
another 515 students are selected at random from florida. they are
given a 3-hour preparation course...
asked 1 hour ago -
A regional distributor deals with a product ABC that has an
annual demand of 3000 unit....
asked 2 hours ago