Macroeconomics (Book Only)
12th Edition
ISBN: 9781285738314
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 11, Problem 2VQP
To determine
Explain the relationship between tax revenue and tax cut.
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Does tax cuts reduce tax revenue?
Will consumers always spend the same percentage of any tax cut? Why might they spend more or less than usual?
When the economy is in recession, government revenue falls due to a falling tax base. Therefore the proper role of government should be to increase taxes and cut spending so as to balance the Federal budget. Do you agree? Why?
Chapter 11 Solutions
Macroeconomics (Book Only)
Ch. 11.1 - Prob. 1STCh. 11.1 - Prob. 2STCh. 11.1 - Prob. 3STCh. 11.1 - Prob. 4STCh. 11.3 - Prob. 1STCh. 11.3 - Prob. 2STCh. 11.3 - Prob. 3STCh. 11.4 - Prob. 1STCh. 11.4 - Prob. 2STCh. 11 - Prob. 1VQP
Ch. 11 - Prob. 2VQPCh. 11 - Prob. 3VQPCh. 11 - Prob. 4VQPCh. 11 - Prob. 5VQPCh. 11 - Prob. 1QPCh. 11 - Prob. 2QPCh. 11 - Prob. 3QPCh. 11 - Prob. 4QPCh. 11 - Prob. 5QPCh. 11 - Prob. 6QPCh. 11 - Prob. 7QPCh. 11 - Prob. 8QPCh. 11 - Prob. 9QPCh. 11 - Prob. 10QPCh. 11 - Prob. 11QPCh. 11 - Prob. 12QPCh. 11 - Prob. 13QPCh. 11 - Prob. 14QPCh. 11 - Prob. 15QPCh. 11 - Prob. 16QPCh. 11 - Prob. 17QPCh. 11 - Prob. 18QPCh. 11 - Prob. 19QPCh. 11 - Prob. 20QPCh. 11 - Prob. 21QPCh. 11 - Prob. 22QPCh. 11 - Prob. 23QPCh. 11 - Prob. 24QPCh. 11 - Prob. 1WNGCh. 11 - Prob. 2WNGCh. 11 - Prob. 3WNGCh. 11 - Prob. 4WNGCh. 11 - Prob. 5WNGCh. 11 - Prob. 6WNGCh. 11 - Prob. 7WNGCh. 11 - Prob. 8WNG
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- A constitutional amendment has been proposed that would require Congress to balance the budget each year. Is it possible to balance the budget every year? Is it desirable?arrow_forwardA friend of yours argues that federal government spending is out of control and significant cuts in spending are needed to reduce the size of the government. She tells you that if we cut federal government spending on research and foreign aid, it will really reduce the size of the government. Refer to Figure 2 in the text for information on the budget. a. What percentage of federal government spending comes from research and foreign aid? b. How much will the federal government spend on research and foreign aid if the federal government's total spending is $1.2 trillion.arrow_forwardWhy tax cuts can increase both aggregate demand and aggregate supply?arrow_forward
- If stability of the economy is the primary objective of Fiscal Policy, then an Annually Balanced Budget (Government Expenditures = Tax Revenues) is the best policy approach. True or False?arrow_forwardWhat are the short-run and long-run implications when it comes to government spending changes versus tax changes?arrow_forwardWhich system of taxes is best? Why does that system is the most effective way for the government to generate revenue and maintain our economy's growth?arrow_forward
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