Macroeconomics
10th Edition
ISBN: 9781319105990
Author: Mankiw, N. Gregory.
Publisher: Worth Publishers,
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Question
Chapter 3, Problem 8PA
(a)
To determine
Impact of increase in tax on public savings.
(b)
To determine
Impact of increase in tax on private savings.
(c)
To determine
Impact of increase in tax on national savings.
(d)
To determine
Impact of increase in tax on investment.
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Chapter 3 Solutions
Macroeconomics
Ch. 3 - Prob. 1QQCh. 3 - Prob. 2QQCh. 3 - Prob. 3QQCh. 3 - Prob. 4QQCh. 3 - Prob. 5QQCh. 3 - Prob. 6QQCh. 3 - Prob. 1QRCh. 3 - Prob. 2QRCh. 3 - Prob. 3QRCh. 3 - Prob. 4QR
Ch. 3 - Prob. 5QRCh. 3 - Prob. 6QRCh. 3 - Prob. 7QRCh. 3 - Prob. 8QRCh. 3 - Prob. 1PACh. 3 - Prob. 2PACh. 3 - Prob. 3PACh. 3 - Prob. 4PACh. 3 - Prob. 5PACh. 3 - Prob. 6PACh. 3 - Prob. 7PACh. 3 - Prob. 8PACh. 3 - Prob. 9PACh. 3 - Prob. 10PACh. 3 - Prob. 11PACh. 3 - Prob. 12PACh. 3 - Prob. 13PACh. 3 - Prob. 14PA
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Similar questions
- Explain what happens to consumption, investment, and the interest rate when the government increases taxes.arrow_forwardThe table gives you information about the economy of Australia. Disposable Calculate the marginal propensity to save. income The marginal propensity to save is 0.25 >>> Answer to 2 decimal places. Saving (billions of dollars per year) 0 100 0 25 200 50 300 75 400 100arrow_forwardExplain why the sum of marginal propensity to consume and marginal propensity to saving it's equal to one?arrow_forward
- If the public consumes $200 billion less and the government purchases $200 billion more (other things unchanging), which of the following statements is true? a. There is an increase in saving, and the economy should grow more quickly. b. Saving is unchanged.c. There is not enough information to determine what will happen to the saving. d. There is a decrease in saving, and the economy should grow more slowly.arrow_forwardWhich of the following would likely increase private saving? a. both expansion of means testing and a consumption tax b. expansion of means testing, but not a consumption tax c. a consumption tax, but not expansion of means testing d. neither expansion of means testing nor a consumption taxarrow_forwardA reduction in personal income taxes increases Aggregate Demand through a. an increase in private savings. b. an increase in investment spending. c. an increase in personal consumption. d. an increase in national savings.arrow_forward
- The catch-up effect refers to the idea that Select one: a. If investment spending is low, increased saving will help investment to catch-up b. None of the answers are correct c. Saving will always catch-up with investment spending d. It is easier for a country to grow fast if it starts out relatively poor e. Rich countries aid relatively poor countries so as to catch them uparrow_forward6 T/F/U. To counterbalance a decrease in investment during a recession, governments offer tax credits to increase investment. Draw and label a figure showing why this is or isn't the case.arrow_forwardSuppose that there’s a recessionary gap, and the country wishes to produce its potential output. Which of the following policy initiatives might help it reach this goal? A.the government increases taxes on consumers and corporations. B.the government initiates policies that encourage private investment spending. C.the government cuts spending programs. D.the government initiates policies that discourage private investment spending.arrow_forward
- The table below shows aggregate values for a hypothetical economy. Suppose this economy has real GDP equal to potential output. Potential GDP $14 000 Government purchases $2100 Investment $300 Consumption $10 000 Net tax revenues $2000 Refering to the table above, what is th eprivate saving for this economy?arrow_forwardIf private investment increases by $1, real GDP increases by $4. What do we call this in economics? Can you explain why this might happen?arrow_forwardEconomists often argue that a large increase in government purchases – such as for the military – will crowd out private-sector spending. Use the investment-saving diagram to defend or to refute their premise.arrow_forward
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