subject
Business, 28.11.2019 03:31 tynasiaparks13

This question compares the effects of a tax cut on aggregate demand and aggregate supply. a tax cut of 150 is targeted to business enterprises so that, as their after-tax profits rise, they raise their spending on investment goods by the full 150. when subsequent rounds of increases in income occur, however, there is a normal marginal propensity to consume, and a multiplier of two. investment has the following effect on aggregate supply: for every $3 of investment goods produced, annual output rises by $1.a) what increase in aggregate demand will result from this tax cut? b) what increase in aggregate supply will occur in the first year? c) comparing your answers in a) and b), which impact is bigger? d) assuming the tax reduction is permanent, how many years will it take before the effects on aggregate demand and aggregate supply are equal? e) suppose the tax cut is not quite as well targeted toward the supply side as the government hoped. of the cut of 150, initially 60 is spent on investment, 60 is spent on consumption, and 30 is saved. answer questions a) through d) above under these circumstances.

ansver
Answers: 2

Other questions on the subject: Business

image
Business, 21.06.2019 21:00, Giovanni0312
During the first month of operations, martinson services, inc., completed the following transactions: jan 2 martinson services received $65,000 cash and issued common stock to the stockholders. 3 purchased supplies, $1,000, and equipment, $12,000, on account. 4 performed services for a customer and received cash, $5,500. 7 paid cash to acquire land, $39,000. 11 performed services for a customer and billed the customer, $4,100. martinson expects to collect within one month 16 paid for the equipment purchased january 3 on account. 17 paid for newspaper advertising, $600. 18 received partial payment from customer on account, $2,000. 22 paid the water and electricity bills, $430. 29 received $2,600 cash for servicing the heating unit of a customer. 31 paid employee salary, $2,900. 31 declared and paid dividends of $1,800. requirements 1. record each transaction in the journal. key each transaction by date. explanations are not required. 2. post the transactions to the t-accounts, using transaction dates as posting references. label the ending balance of each account bal, as shown in the chapter. 3. prepare the trial balance of martinson services, inc., at january 31 of the current year. 4. mark martinson, the manager, asks you how much in total resources the business has to work with, how much it owes, and whether january was profitable (and by how much)?
Answers: 1
image
Business, 22.06.2019 17:30, dani4685
One of your new suppliers, kim, has been hearing rumors about your firm’s lack of capability to deliver high quality products and writes an email asking you to address the claims being made. in replying to her, you want to be sure that you are very clear and leave no room for misinterpretation. which of the following aspects of effective communication should you give the most attention? (a) making sure you understand kim’s areas of expertise. (b) supporting your reply with relevant data and facts. (c) establishing your credibility as an expert. (d) paying attention to implied communications.
Answers: 2
image
Business, 22.06.2019 17:30, tysisson9612
You should do all of the following before a job interview except
Answers: 2
image
Business, 22.06.2019 18:10, salvadorperez26
Find the zeros of the polynomial 5 x square + 12 x + 7 by factorization method and verify the relation between zeros and coefficient of the polynomials
Answers: 1
You know the right answer?
This question compares the effects of a tax cut on aggregate demand and aggregate supply. a tax cut...

Questions in other subjects:

Konu
Mathematics, 26.10.2019 00:43