Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Question
Chapter 27, Problem 4DQ
To determine
The arguments for and against a supply-side tax cut.
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Economics: Principles & Policy
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- Suppose that when he took office in January 2009, President Obama wanted to reduce the level of spending by the Drug Enforcement Administration during fiscal 2009. What budget procedure would have allowed him to do that?arrow_forwardWhat will an increase in the tax rate causearrow_forwardWhy will direct taxes increase faster than per capita income?arrow_forward
- 20 Lilliput is a country that has closed borders and does not import or export any goods or services; hence, they do not worry about trade with other countries. Total spending for the federal government of Lilliput for the last fiscal year was $24.19 billion. The country collected $22.9 billion in taxes during this same fiscal year. Assume government transfers were zero. Based on this information, what is Lilliput's budget balance? Enter your answer to two decimal places. budget balance: $ In the last fiscal year, Lilliput was running a budget surplus a budget deficit a balanced budget billionarrow_forwardWhen supply-side economists propose cuts in tax rates, most mainstream economists are likely to take the position that they will be: Group of answer choices Effective because the supply-side effects will outweigh the demand-side effects Effective because the demand-side effects will outweigh the supply-side effects Ineffective because the demand-side effects will outweigh the supply-side effects Ineffective because the demand-side and supply-side effects will offset each otherarrow_forward- Most economists have reached the following conclusion about supply-side economics. Supply-side tax cuts are likely to reduce income inequality. Supply-side tax cuts are almost certain to lead to smaller budget deficits. Supply-side tax cuts are likely to widen income inequality. None of these.arrow_forward
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