Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 18, Problem 5DQ
To determine
The relation between Laffer curve and supply side economics.
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Students have asked these similar questions
Which of the following changes in personal income tax would lead to the smallest increase in
consumption?
O a.
O b. a $15 000 decrease in taxes, if MPC equals
0.6
O c.
a $30 000 decrease in taxes, if MPC equals
0.25
Oe.
a $20 000 decrease in taxes, if MPC equals
0.5
O d. a $12 000 decrease in taxes, if MPC equals
0.75
a $10 000 decrease in taxes, if MPC equals
0.2
QUESTION 16
If the marginal propensity to save is 0.1, the marginal propensity to import is 0.1 and the marginal tax rate is 0.2, how much would consumption increase if income
rises by £8billion?
O a. 4.8
O b. 13.3
O c. 3.2
O d. 20
4
Which of the following is correct?
1) Expansionary fiscal policy during a recession means cutting taxes, increasing
government spending, or taking both actions.
2) The goal of expansionary fiscal policy is to rein in inflation.
3) Expansionary fiscal policy tends to lead to a smaller budget deficit.
O 4) Expansionary fiscal policy is always better than contractionary fiscal policy for
4)
the economy.
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