Macroeconomics: Principles, Problems, & Policies
20th Edition
ISBN: 9780077660772
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 5, Problem 2RQ
To determine
The marginal benefit of the government program.
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Students have asked these similar questions
The government raises revenue through taxation to pay for the services it provides.
a. True
b. False
Explain in no less than 4 sentences why Taxation is called the Lifeblood if the Government/State.
Tax incidence usually falls
A. only on producers.
B. on both consumers and producers.
C. only on consumers.
D. on the government.
Chapter 5 Solutions
Macroeconomics: Principles, Problems, & Policies
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- By using graphs, show and explain how an increase in tax rates can increase dead-weight loss anddecrease the government revenue after a pointarrow_forwardTo minimize deadweight loss associated with taxation, policy makers should A.impose flat tax rates instead of progressive tax rates. B.impose taxes in markets with positive externalities. C.all of these D.impose taxes in markets with imperfect competition.arrow_forwardA government decides that product X is a demerit good and product Y is a public good. Which policy measures is it likely to adopt in relation to the two products? Pick a,b,c, or d a. X- subsidize & Y- impose a maximum price b. X- directly provide & Y- subsidize c. X- impose a maximum price & Y- tax d. X- tax & Y - directly providearrow_forward
- what is the economic impact of government overreach? How is this seen in the current and past economies? Answer In own wayarrow_forwardWhich of the following is not an advantage of corrective taxes? Ca. They subsidize the production of goods with positive externalities. Ob. They enhance economic efficiency. Oc. They raise revenues for the government. Od. They move the allocation of resources closer to the social optimum.arrow_forwardWould you kindly explain the fallacy or mistake in this type of thinking. Identify the fallacy or mistake in thinking in each of the following statements: a. Lowering taxes always lowers government revenues. b. Whenever there is a economic expansion, imports increase.arrow_forward
- Which is wrong? EXPLAIN a. The government should tax itself. b. The government can tax itself. c. The power to tax includes the power to exempt d. Taxation is essentially a legislative function.arrow_forwardSuppose that before tax was imposed 400 million gallons of gasoline was supplied at $3.00 per gallon.a. What happens when government imposes a tax of 60 cents per gallon on sellers? b. How would such a tax affect the market for gasoline i.e. what is the new equilibrium? c. On whom does the incidence of the tax fall more heavily? d. How much government revenue will be generated by the excise tax? e. What happens when government imposes a tax of 60 cents per gallon on buyers? f. How would such a tax affect the market for gasoline i.e. what is the new equilibrium?arrow_forwardIn macroeconomic, How does the government tax?arrow_forward
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