ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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The policies of the federal government influence the outcomes of the various activities in that economy. When government policies change or unplanned events occur, the resulting economic events or activity will usually change. Listed below is a policy or event that affect the performance of the economy:
- The federal government, in an effort to stimulate the economy, decreases taxes on all individuals except those earning over $250,000 per year.
For the items above, describe what would be the likely outcome in the economy. Use the appropriate tools of analysis, such as aggregate demand and
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- why does the budget require a forecast of the economy? under what circumstances would actual government spending and tax revenue fail to match the budget as approved?arrow_forwardA government is evaluating the effectiveness of a new tax policy. Economists collect data on tax rates, government revenue, and economic growth before and after the policy implementation. They use econometric methods to assess the policy's impact on economic indicators. This application of econometrics primarily serves to:A) Estimate policy impactB) Create new tax lawsC) Design government websitesD) Recruit government staff Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accuratearrow_forwardAnswer choices to the first box is "lower, higher, the same". Answer choices to the second box is "lower incomes, higher incomes, all income levels equally".arrow_forward
- Consider the economy of Cocoland, where citizens consume only coconuts. Assume that coconuts are priced at $1 each. The government has devised the following tax plans: Plan A • Consumption up to 1,000 coconuts is taxed at 35%. • Consumption higher than 1,000 coconuts is taxed at 20%. Plan B • Consumption up to 2,000 coconuts is taxed at 10%. • Consumption higher than 2,000 coconuts is taxed at 25%. Use the Plan A and Plan B tax schemes to complete the following table by deriving the marginal and average tax rates under each tax plan at the consumption level of 700 coconuts, 1,500 coconuts, and 2,500 coconuts, respectively. Consumption Level Plan A Plan B (Quantity of coconuts) Marginal Tax Rate Average Tax Ratearrow_forwardWhich is a valid interpretation of Keynes' law? Focusing exclusively on supply side economics will make the economy grow the fastest. Each time goods are produced, it represents income for someone. Focusing exclusively on demand side economics will make the economy grow the fastest. A given value of supply creates an equal value of demand somewhere in the economy. Demand creates its own supply. In the long run, supply and demand grow at the same rate.arrow_forwardWhat is fiscal policy? When should fiscal policy be used? Are there any negatives associated with fiscal policy? What is monetary policy? When should monetary policy be used? Are there any negatives associated with monetary policy? Is monetary or fiscal policy easier to implement?arrow_forward
- Question 26 Explain and analyse the alternative supply side policies available to a government AND evaluate the view that supply side policy is the most effective method of reducing the level of unemployment in an economy.arrow_forwardSuppose that the Philippine tax schedule given below is being implemented this year. (sorry, disregard the box) Tax Payment P 1,000 4,500 14,000 Annual Income P10,000 30,000 70,000 140,000 250,000 500,000 35,000 75,000 160,000arrow_forwardWhat is the best approach to managing the economy, supply-side or demand-side economics? There are two schools of thought on how to managing the economy. The first is demand-side economics which also the Keynesian approach. This approach maintains that the demand for products and services drives the economy as such economic policies should focus on the aggregate demand curve. The other approach is called supply-side economics or more popularly referred to as Reaganomics. In this trickle-down approach, it is postulated that the production of goods and services is what drives the economy with the focus on the aggregate supply curve. Both fiscal and monetary policies have the potential to stimulate change in either the aggregated demand or the aggregate supply curves. In your initial post defend which approach should be used to (ensure to include in your subject line, which approach you are defending): Restore the economy that is in a recession. Identify the challenges that may be…arrow_forward
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