Principles of Macroeconomics (12th Edition)
12th Edition
ISBN: 9780134078809
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 12, Problem 1.1P
To determine
Identify the role imposing a tax in an economy.
Expert Solution & Answer
Explanation of Solution
When the tax is imposed by the government on an economy, it will reduce the disposable income of the people. When the income falls, people will reduce the consumption. As a result, the overall aggregative
If the
Economics Concept Introduction
Concept introduction:
Tax: The tax is a compulsory and unilateral payment made by the people towards the government which acts as the major source of revenue to the government. There are different types of taxes such as the income tax, property tax, professional tax, and so on.
Disposable income: Disposable income refers to the amount remaining after paying all the necessary tax.
Expansionary fiscal policy: It is a form of fiscal policy that involves either decreasing taxes or increasing government expenditures, or both, in order to fight recessionary pressures.
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Chapter 12 Solutions
Principles of Macroeconomics (12th Edition)
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