Assume that, without taxes, the consumption schedule for an economy is as shown in the table below. Impose a progressive tax such that the tax rate is O percent when GDP is $100, 5 percent at $200, 10 percent at $300, 15 percent at $400, and so forth. Determine the new consumption schedule, noting the effect of this tax system on the MPC (tax inclusive) and the multiplier. Instructions: In the table below, enter your answers (except the MPC) as whole numbers. For the MPC, round your answers to 2 decimal places. Consumption Before Tax, Billions Disposable Income, Billions Consumption After Tax, Billions Tax Rate, Percent GDP, Billions Tax, Billions MPC $100 $120 200 200 300 280 400 360 500 440 600 520 700 600
Assume that, without taxes, the consumption schedule for an economy is as shown in the table below. Impose a progressive tax such that the tax rate is O percent when GDP is $100, 5 percent at $200, 10 percent at $300, 15 percent at $400, and so forth. Determine the new consumption schedule, noting the effect of this tax system on the MPC (tax inclusive) and the multiplier. Instructions: In the table below, enter your answers (except the MPC) as whole numbers. For the MPC, round your answers to 2 decimal places. Consumption Before Tax, Billions Disposable Income, Billions Consumption After Tax, Billions Tax Rate, Percent GDP, Billions Tax, Billions MPC $100 $120 200 200 300 280 400 360 500 440 600 520 700 600
Chapter9: Aggregate Demand
Section: Chapter Questions
Problem 5.11P
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Assume that, without taxes, the consumption schedule for an economy is as shown in the table below. Impose a progressive tax such that the tax rate is 0 percent when
Instructions: In the table below, enter your answers (except the MPC) as whole numbers. For the MPC, round your answers to 2 decimal places.
see the picture to understand :) PS. it's the yellow thing
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