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1 year ago

The proposition that increases in the government budget deficit has no effect on aggregate demand is called the

1 answer:

3 0

The proposition that increases in the government budget deficit has no effect on aggregate demand is called the Ricardian Equivalence Theorem.

<h3><u>What is Ricardian Equivalence Theorem?</u></h3>

According to the economic principle known as Ricardian equivalence, paying government expenditures with current taxes or future taxes (as well as current deficits) will have similar impacts on the overall state of the economy.
Therefore, increased government expenditure that is financed by debt will not be able to stimulate the economy since investors and consumers are aware that the loan would eventually need to be repaid through future taxes.

The hypothesis contends that consumers will save because they anticipate paying higher taxes in the future to reduce the debt, which will counteract the rise in aggregate demand brought on by higher government spending.

Therefore, The proposition that increases in the government budget deficit has no effect on aggregate demand is called the Ricardian Equivalence Theorem.

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Suppose a tax of $4 per unit is imposed on a good, and the tax causes the equilibrium quantity of the good to decrease from 2,00

Marina CMI [18]

Answer:

option (c) $600

Explanation:

Given:

Tax = $4 per unit

Initial equilibrium quantity = 2,000 units

Final equilibrium quantity = 1,700 units

Decrease in consumer surplus = $3,000

Decrease in consumer surplus = $4,400

Now,

Deadweight Loss is calculated using the formula:

Deadweight loss

= $\frac{1}{2}$ × Tax × (Original equilibrium quantity - New equilibrium quantity)

on substituting the respective values, we get

Deadweight loss = $\frac{1}{2}$ × 4 × (2,000 - 1,700)

Deadweight loss = 2 × (3) = $600

Hence,

the correct answer is option (c) $600

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2 years ago

Five-year-old lilah is beginning to show signs of being able to plan ahead in a somewhat rational manner. at her age, this devel

RideAnS [48]

<span>This would be her frontal lobe. This part of the brain is responsible for higher-order thinking and rational decision-making. Neural network growth is expansive at early ages, with children being able to make decisions for themselves that show signs of being rational and thought-out.</span>

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3 years ago

1. A parent provides consulting services to its wholly-owned subsidiary during the year. The parent charged the subsidiary $600,

Fed [463]

Answer:

Explanation:

When consolidating parent and a wholly-owned subsidiary we aim to eliminate entries related to the inter company services. Since the subsidiary had recorded a debit to service expense when it was rendered, the adjusting entry would be a credit to the service expense amount by the same figure charged i.e. $600,000 in this case

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2 years ago

Sue bought a copy of her credit report, and found incorrect information in it. she can:________

Helen [10]

Sue bought a copy of her credit report and found incorrect information in it. she can request that the credit bureau correct her credit report

A credit report is a statement that provides information about your credit activity and current credit situation, such as: B. Loan payment history and credit account status. Sep 1, 2020

Loan repayments, available credit, monthly debt amounts, and other types of information help prospective lenders determine whether credit risk is high or low.

credit report is a record of a borrower's responsible debt repayment. A credit report is a record of a borrower's credit history from various sources such as banks, credit card companies, collection agencies, and governments.

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1 year ago

Employees with a(n) ________ locus of control will probably resist close managerial supervision and should probably be placed in

Katena32 [7]

Answer:

Internal

Explanation:

Internal locus of control is the term which is defined as the belief that the events in life of the person, whether bad or good, are caused or occurred through the controllable factors like effort, attitude of the person and preparation.

For example, when the person fail in test, the person acknowledge that he had studied adequate and did not understand the vital questions.

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2 years ago