Question
In: Economics
Assume the government has a balanced budget and that the economy is experiencing a period of...
Assume the government has a balanced budget and that the economy is experiencing a period of growth higher than predicted, tax receipts (collected) by the government are likely to
A) increase and result in a budget deficit.
B) decrease and result in a budget deficit.
C) increase and result in a budget surplus.
In 2016, the federal government spent $200 billion but collected $180 billion in taxes, therefore in 2016, the government accumulated
A) a budget surplus of $20 billion.
B) a federal debt of $666 billion.
C) a budget deficit of $20 billion.
An example of a progressive tax would be
A) a Social Security tax rate of 5% on earned income below $100,000 and 0% on income earned above $100,000.
B) the Medicare payroll tax of 2.9% of income for everyone, regardless of how much they earn.
C) an income tax with a 10% tax rate on low income households and 20-30% tax rates on higher income households.
If you were to identify one of the main differences between a bank and a credit union, what would it be?
A) A bank is owned and run by its members.
B) A credit union has to be FDIC insured, but not banks.
C) A credit union is owned and run by its members.
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Assume the government has a balanced budget and that the economy is experiencing a recession, the...
Assume the government has a balanced budget and that the economy
is experiencing a recession, the tax revenue collected by the
government is likely to ________, which would lead to a
________.
Country A is currently experiencing a balanced budget in a normal cycle. The government in country...
Country A is currently experiencing a balanced budget in a
normal cycle. The government in country A is in charge of
undertaking different policies to prevent a predictable recession
in future.
(a) Suppose the government offers a stimulus package to prevent
the recession. Describe how this stimulus package could prevent the
recession and would it necessarily work well?
(b) Now suppose there is a Country B that trades with Country A.
In particular, Country A imports some products from Country...
Country A is currently experiencing a balanced budget in a normal cycle. The government in country...
Country A is currently experiencing a balanced budget in a
normal cycle. The government in country A is in charge of
undertaking different policies to prevent a predictable recession
in future.
(a) Suppose the government offers a stimulus package to prevent
the recession. Describe how this stimulus package could prevent the
recession and would it necessarily work well?
(b) Now suppose there is a Country B that trades with Country A.
In particular, Country A imports some products from Country...
A government is running a balanced budget. An election is approaching and the government decides on...
A government is running a balanced budget. An election is
approaching and the government decides on a one-time, temporary,
massive tax cut that will cut tax revenue by $50 billion in one
year; after the year is over, tax rates and tax revenue return to
normal. The government decides to issue perpetual bonds of $50
billion to cover the cost of the tax cut. The interest rate on
these bonds is constant at 6%. The tax to pay the interest...
Consider a two-period model of a closed economy with government. Assume that the representative agent is...
Consider a two-period model of a closed economy with government.
Assume that the representative agent is endowed with ?1 and ?2 as
initial endowments in period 1 and period 2 respectively, and has
the utility function ? = ln ?1 + ? ln ?2, where ?1 and ?2 denote
consumption and ? is the discount rate. Suppose that the government
spends ?1 and ?2 in period 1 and period 2 and finances its
expenditure through lump-sum taxes ?1and ?2 in...
Currently, a government's budget is balanced. The marginal propensity to consume is 0.80. The government has...
Currently, a government's budget is balanced. The marginal
propensity to consume is 0.80. The government has determined that
each additional $10 Billion in new government debt it issues to
finance a budget deficit pushes up the market interest rate by 0.1
percentage point. It has also determined that every 0.1 percentage
point change in the market interest rate generates a change in
investment expenditures equal to $2 Billion. Finally, the
government knows that to close a recessionary gap and take...
Currently, a government's budget is balanced. The marginal propensity to consume is 0.80. The government has...
Currently, a government's budget is balanced. The marginal
propensity to consume is 0.80. The government has determined that
each additional $10 Billion in new government debt it issues to
finance a budget deficit pushes up the market interest rate by 0.1
percentage point. It has also determined that every 0.1 percentage
point change in the market interest rate generates a change in
investment expenditures equal to $2 Billion. Finally, the
government knows that to close a recessionary gap and take...
Suppose that Imagineland is an open economy. Initially, the government balanced. Suppose the government runs a...
Suppose that Imagineland is an open economy. Initially, the
government balanced. Suppose the government runs a budget
surplus.
a. Use the appropriate diagrams to determine the effects on the
real interest funds market.
b. In the foreign currency exchange market, show the effects of
the budget the balance of trade.
4. Assuming the government of country Balistan has a balanced budget requirement and collects $100 million...
4. Assuming the government of country Balistan has a balanced
budget requirement and collects $100 million more in taxes than
expected in 2016. As a result, the government would have to
increase taxes by $100 million.
increase spending by $100 million.
reduce spending by $100 million.
5.
Assuming that income tax is the only source of revenue for the
government, with tax revenue of $50 billion and government spending
totaling $70 billion, which of the following is true of the...
A local government has the following transactions during the current fiscal period. The budget for the...
A local government has the following transactions during the
current fiscal period.
The budget for the police department, ambulance service, and
other ongoing activities is passed. Funding is from property taxes,
transfers, and bond proceeds. All monetary outflows will be for
expenses and fixed assets. A deficit is projected.
A bond is issued at face value to fund the construction of a new
municipal building.
A computer is ordered for the tax department.
The computer is received.
The invoice for...
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