**Instructions:** In the table, enter your answers as a whole number. Round your answers for the MPC and the multiplier to 1 decimal place.What is the value of the MPC?[Input Box]b. Assume now that a lump-sum tax is imposed such that the government collects $10 billion in taxes at all levels of GDP. Add the after-tax consumption to the table below.| GDP, Billions | Consumption, Before Tax, Billions | Lump-Sum Tax, Billions | Consumption, After Tax, Billions ||---------------|----------------------------------|------------------------|---------------------------------|| 100 | 120 | 10 | [Input Box] || 200 | 200 | 10 | [Input Box] || 300 | 280 | 10 | [Input Box] || 400 | 360 | 10 | [Input Box] || 500 | 440 | 10 | [Input Box] || 600 | 520 | 10 | [Input Box] || 700 | 600 | 10 | [Input Box] |Compare the MPC and the multiplier with those of the pretax consumption schedule.MPC after tax = [Input Box] Multiplier after tax = [Input Box]**The MPC and multiplier are:**- [ ] higher before the tax.- [ ] higher after the tax.- [ ] the same before and after the tax.

a) MPC = ∆C/∆Y From the given table, ∆C = 80 ∆Y = 100 Hence MPC (c) = 80/100 = 0.8

Instructions: In the table, enter your answers as a whole number. Round your answers for the MPC and the multiplier to 1 decimal place. What is the value of the MPC? b. Assume now that a lump-sum tax is imposed such that the government collects $10 billion in taxes at all levels of GDP. Add the after-tax consumption to the table below. Consumption, Before Tax, Billions Lump-SumTax, Bilons Consumption, After Тах, Billons GDP, BIllions 100 120 10 200 200 10 300 280 10 400 360 10 500 440 10 600 520 10 700 600 10 Compare the MPC and the multiplier with those of the pretax consumption schedule. MPC after tax= Multiplier after tax = The MPC and multiplier are: O higher before the tax. O higher after the tax. O the same hefore and after the tay

Instructions: In the table, enter your answers as a whole number. Round your answers for the MPC and the multiplier to 1 decimal place. What is the value of the MPC? b. Assume now that a lump-sum tax is imposed such that the government collects $10 billion in taxes at all levels of GDP. Add the after-tax consumption to the table below. Consumption, Before Tax, Billions Lump-SumTax, Bilons Consumption, After Тах, Billons GDP, BIllions 100 120 10 200 200 10 300 280 10 400 360 10 500 440 10 600 520 10 700 600 10 Compare the MPC and the multiplier with those of the pretax consumption schedule. MPC after tax= Multiplier after tax = The MPC and multiplier are: O higher before the tax. O higher after the tax. O the same hefore and after the tay

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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