MACROECONOMICS
14th Edition
ISBN: 9781337794985
Author: Baumol
Publisher: CENGAGE L
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Question
Chapter 11, Problem 5DQ
To determine
To describe: The comparison of the effect of Investment,
To determine
To describe: The comparison of the effect of Investment, Aggregate Supply and Tax revenue to cut the capital gains tax.
To determine
To describe: The comparison of the effect of Investment, Aggregate Supply and Tax revenue to cut the capital gains tax.
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Students have asked these similar questions
The following graph shows the aggregate demand curve.
Shift the aggregate demand curve on the graph to show the impact of a tax hike.
(?)
130
Aggregate Demand
120
110
100
90
Aggregate Demand
80
70
10
20
30
60
OUTPUT
Suppose the governments of two different economies, economy J and economy K, implement a permanent tax cut of the same size. The marginal
propensity to consume (MPC) in economy J is 0.85 and the MPC in economy K is 0.8. The economies are identical in all other respects.
The tax cut will have a larger impact on aggregate demand in the economy with the
PRICE LEVEL
One concern about the government borrowing in order to finance its projects is known as the "crowding out effect". This can best be described as
an decrease in the demand curve, which decreases equilibrium nominal interest rates, making it easier for private businesses to obtain loans.
an increase in the demand curve, which increases equilibrium nominal interest rates, making it more difficult for private businesses to obtain loans.
an increase in the supply curve, which decreases equilibrium nominal interest rates, making it easier for private businesses to obtain loans.
a decrease in the supply curve, which increases equilibrium nominal interest rates, making it more difficult for private businesses to obtain loans.
Question 21
An increase in real per capita GDP in an economy would __________ the average standard of living and would _________ life expectancy.
raise; have little effect on
raise; shorten
raise; increase
have no effect on; increase
lower; shorten
Question 22
An increase in _________ would lead to an increase in long-run economic growth.
consumer spending and borrowing
government taxes and fees
resources and technology
imports and exports
prices and interest rates
Question 23
Which of the following are the three major categories of resources?
physical capital, technology, institutions
land, labor, technology
institutions, human capital, land
natural resources, physical capital, human capital
labor, physical capital, technology
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Similar questions
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