Question

In: Economics

PLEASE ANSWER C&D ONLY . THE REST HAS ALREADY BEEN ANSWERED. Say the marginal tax rate...

PLEASE ANSWER C&D ONLY . THE REST HAS ALREADY BEEN ANSWERED.

Say the marginal tax rate is 20 percent and that government expenditures do not change with output. Say also that the economy is at potential output and that the deficit is $450 billion.

a. What is the size of the cyclical deficit?

Answer = $0

  b. What is the size of the structural deficit?

Answer = $450 billion.

c. How would your answers to a and b change if the deficit was still $450 billion but output was $200 billion below potential?

    Instructions: Round your answers to the nearest whole dollar amount. Leave no cell blank. You must enter "0" for the answer to grade correctly.

    Cyclical deficit is $ __________billion.

    Structural deficit is $ ________ billion.

d. How would your answers to a and b change if the deficit was still $450 billion but output was $350 billion above potential?

    Instructions: Round your answers to the nearest whole dollar amount. Leave no cell blank. You must enter "0" for the answer to grade correctly.

    Cyclical surplus is _________ $ billion.

    Structural deficit is ___________$ billion.

Expert Solution

Answer:

C]

Marginal tax rate is 20%

Actual deficit is $450 billion

The economy is operating $200 billion below its potential. This implies that the actual output in the economy is smaller than the potential output by $200 billion or potential output is greater than the actual by $200 billion

Thus Potential output- Actual output = $200

Cyclical deficit = Tax rate * (Potential output- Actual output)

= 20% * 200

= $40 billion

Therefore Cyclical deficit is $40 billion

Structural deficit = Actual deficit – Cyclical deficit

= 450 – 40 = $410 billion

Cyclical deficit is $ 40 billion.

Structural deficit is $ 410 billion.

D]

Marginal tax rate is 20%

Actual deficit is $450 billion

The economy is operating $350 billion above its potential. This implies that the actual output in the economy is greater than the potential output by $350 billion or potential output is smaller than the actual by $350 billion

Thus Potential output- Actual output = - $350 billion

Cyclical surplus = Tax rate * (Potential output- Actual output)

= 20% * (-350)

= - $70 billion

Therefore Cyclical surplus is -$70 billion

Structural deficit = Actual deficit – Cyclical surplus

= 450 – (-70) = 450 + 70 = $520 billion

Cyclical surplus is -$70 billion.

Structural deficit is $520 billion.

Rahul Sunny answered 7 months ago

Please answer with a new answer not one that has already been answered on here before....

Please answer with a new answer not one that has already been answered on here before. Many supervisors are not well-trained on the difficult task of terminating an employee and instead resort to other methods of forcing someone out of the organization. Methods include giving the employee unpleasant work tasks, reducing their hours, or modifying their jobs in some negative way. What are the ethical issues raised by this strategy and what are the risks to the organization?

Question 1 has already been answered. Please answer question 2 below the table only. Find out...

Question 1 has already been answered. Please answer question 2 below the table only. Find out the NPV, IRR and Payback period for each of the following three projects. Assume I=6%. (60 points) Project CF0 CF1 CF2 CF3 CF4 CF5 A -12,000 3000 3000 4000 4000 1000 B -12,000 4000 4000 3000 3000 1000 C -12,000 3000 3000 3000 3000 1000 D -12,000 5000 3000 5000 3000 0 E -12,000 3000 3000 3000 3000 5000 F...

I have A B and C answered I only need the answer to D and E....

I have A B and C answered I only need the answer to D and E. I have included the correct answers for A B and C Problem 8-41 (LO. 2, 3, 9) Lori, who is single, purchased 5-year class property for $200,000 and 7-year class property for $400,000 on May 20, 2016. Lori expects the taxable income derived from her business (without regard to the amount expensed under § 179) to be about $800,000. Lori wants to elect immediate...

**New code needed! Please do not reference code that has already been answered for this question...

**New code needed! Please do not reference code that has already been answered for this question as that code contains errors*** Write a C++ program to simulate a service desk. This service desk should be able to service customers that can have one of three different priorities (high, medium, and low). The duration for any customer is a random number (between 5 minutes and 8 minutes). You need to write a program that will do the following: Generate random 100...

Please answer Question 2 only. Question 1 has been answered, but need to compare answers from...

Please answer Question 2 only. Question 1 has been answered, but need to compare answers from Question 2 with Question 1. Child-abuse victims and developing cancer: Truth or myth? Is physical childhood abuse somehow related to the development of cancer later in life? A recent survey revealed that people who have been physically abused as children were 49% more likely to develop cancer as adults. ------------------------------------------------------------------- 1. Suppose in a region in Saskatchewan, among a group of 20 adults with...

Answer this fully please, type your answer, someone already answered it here but it was wrong,...

Answer this fully please, type your answer, someone already answered it here but it was wrong, only answer (((Quick ratio: ))))))and its not 1.2, 1.2 if you get any of these numbers dont reply to my question please PepsiCo, Inc. (PEP), the parent company of Frito-Lay snack foods and Pepsi beverages, had the following current assets and current liabilities at the end of two recent years: Current Year (in millions) Previous Year (in millions) Cash and cash equivalents $9,158 $9,096...

**I KNOW THIS QUESTION HAS ALREADY BEEN ANSWERED; HOWEVER I WOULD LIKE A DIFFERENT ANSWER* With...

******I KNOW THIS QUESTION HAS ALREADY BEEN ANSWERED; HOWEVER I WOULD LIKE A DIFFERENT ANSWER***** With the aid of supply and demand diagrams, explain how each of the following would likely affect the prices and quantities of cigarettes sold in the US. (a) A cure is found for lung cancer. (b) There is a substantial increase in wages in tobacco growing states. (c) A fertilizer that increases the yield per acre of tobacco is discovered. (d) There is a substantial...

This question has already been answered, but there was not as much detail as i needed...

This question has already been answered, but there was not as much detail as i needed to understand what exactly to do and i need to understand it quick... could you please walk me through how to do this, but specifically A and B please plug in all numbers and state where they came from , thank you so much! Calculate the potential in the following cell Pb|Pb2+(1.00M)|| Ag+(1.00M) |Ag a. right at the beginning when you start using this...

I only need question C answered, but I provided the rest of the worksheet to use...

I only need question C answered, but I provided the rest of the worksheet to use as reference in order to do so. Q1. Jamie wants to forecast the number of students who will enroll in operations management next semester in order to determine how many sections to schedule. He has accumulated the following enrollment data for the past six semesters: SEMESTER STUDENTS ENROLLED IN OM 1 270 2 310 3 250 4 290 5 370 6 410 a (2...

Please answer a b c d e HP Foods is a private company that has been...

Please answer a b c d e HP Foods is a private company that has been in operation for many years in Birmingham. Owing to a rising need to raise additional capital the shareholders have passed a resolution to convert the company into a public company and seek listing on the London Stock Exchange. You have been contracted to help the Directors to carry the resolution through. During your preliminary discussion with the Directors, you realised that they were not...