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3 years ago

Explain the roles of taxation and government expenditure in the circular flow of income

1 answer:

6 0

The role of taxation in the circular flow of income, is basically to have a medium of revenue for the government, if the government is able to earn money, they are able to spend it on the economy.
So then the role of Government expenditure is to make sure the money goes back into the economy, if the government were to save the money, the economy will have restriction to grow, if all the money the government creates from tax was put back into the economy by spending in say, Heath, Education, Investment, the economy can grow because then household will spend money from their income to utilise these industries.
Hopefully this helps!

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Robert receives a salary of $60,000 per year, or $2,500 semi-monthly. How

IrinaK [193]

The amount that Robert will pay in unemployment taxes for the entire year will be B. $0.

<h3>Determination of Unemployment Taxes Payable</h3>

Employers are subject to an unemployment tax which is known as Federal Unemployment Tax Act (FUTA) depending on the wages and salaries they pay their workers.

Employers must pay FUTA if their employees earn $1500 or more per calendar quarter.

Employers are not obligated to withhold FUTA from employees if we compare it to other payroll-based taxes.

As a result, no unemployment taxes should be deducted from Robert's pay.

Learn more about unemployment tax here: brainly.com/question/15049474.

7 0

1 year ago

Suppose that we observe two comparable properties that have each sold twice within the past four years. Property A sold 24 month

Elina [12.6K]

Answer:

0.475% per month

Explanation:

value of property A 24 months ago = $500,000

current value of property A = $425,000

total decrease in value = $500,000 - $425,000 = $75,000 or 15%

monthly % decrease:

1.15 = (1 + r)²⁴

²⁴√1.15 = (1 + r)

1.0058 = 1 + r

r = 0.00584 = 0.58% decrease per month

value of property B 48 months ago = $575,000

current value of property A = $465,000

total decrease in value = $575,000 - $465,000 = $110,000 or 19.13%

monthly % decrease:

1.1913= (1 + r)⁴⁸

⁴⁸√1.1913 = (1 + r)

1.0037 = 1 + r

r = 0.0037 = 0.37% decrease per month

if both properties are weighted equally, then the market decrease per month = (0.58% x 1/2) + (0.37% x 1/2) = 0.475% per month

4 0

3 years ago

You would like to have extra spending money, so you decide to work part time at the local gym. The job pays you $15 per hour and

iren [92.7K]

Answer:

Gross Pay 300 dollar

Federal Income Tax $ 30

FICA $ 22.95

SUTA $ 9

Net Pay: 238.05

As a percentage of gross pay: 79.35%

Explanation:

Gross pay:

20 hours x $15 each = $ 300

Taxes:

income tax: 300 x 10% = 30

FICA 300 x 7.65% = 22.95

SUTA taxes 300 x 3% = 9

Net pay 300 - 30 - 22.95 - 9 = 238.05

Net pay as a percentage of gross pay:

238.05 / 300 = 0.7935 = 79.35%

6 0

3 years ago

Jane is the manager of a local bank branch in College Station where he consumes bundles of two commodities x and y. Prices in Co

Sholpan [36]

Answer:

Remain the same

Explanation:

$U(x,y) = xy^{2}$ ......................................................... (1)

ICS = Income in College Station = $6,000

CSpx = Price of x in College Station = 1

CSpy = Price of y in College Station = 5

ID = Income in Dallas = ?

Dpx = Price of x in Dallas = 4

Dpy = Price of y in Dallas = 5

Step 1

Assume that Jane always divides his income in College Station equally into two, i.e. $3,000 each, to buy x and y, the quantities of x and y he can buy in College Station can be calculated by dividing the $3,000 by the prices of x and y. This is calculated as follows:

CSqx = Quantity of x in College Station = $3,000 ÷ 1

= 3,000 units

CSqy = Quantiy of y in College Station = 3,000 ÷ 5

= 600 units

Jane's utility in College Station can be calculated by amending equation (1) and substituting 3,000 units for x and 600 units for y as follows:

$CSU(CSqx,CSqy) = (CSqx.CSqy^{2})$

$CSU(3000,600) = (3000*600^{2})$

= 3,000 * 360,000

CSU(3000, 600) = 1,080,000,000 utils .......................... (2)

Step 2

Since Jane is guaranteed a salary in Dallas with which he would be able to buy exactly what he buys in College Station, this implies that the salary in Dallas will make him to be able to buy 3,000 units of good x and 600 units of good which he currently buys in College Station.

Since

CSpx = 1, which is less than Dpx = 4

But

CSpy = 5, is equal to Dpy = 5

We need to calculate how much his Income will increase in Dallas to be able to buy 3,000 units of good x in Dallas given that its price is $4. Therefore, his income will increase by multiplying $4 by 3000 units and deduct $3,000 he was spending in College Station on x as follows:

IID = Increase in Income in Dallas = (3,000 * $4) - $3,000

= $12,000 - $3,000

= $9,000

Therefore, ID (Income in Dallas) is the addition of IDD and ICS (Income in College Station) calculated as:

ID = IID + ICS

= $9,000 + $6,000

= $15,000

Conclusion

With the ID of $15,000, Jane will be spending $12,000 to buy 3,000 units of good x in Dallas and continue to spend $3,000 to buy 600 units of good y in Dallas.

This will make Jan's utility in Dallas (DU) to be equal to 1,080,000,000 utils as obtained in equation (2) above.

Therefore, Jane's utility will remain the same based on the tangency rule which states that a consumer will choose a combination of two goods at which an indifference curve is tangent to the budget line, i.e. his income.

5 0

3 years ago

Suppose that the manager of a firm operating in a perfectly competitive market has estimated the average variable cost function

dedylja [7]

Answer:

267 output

Explanation:

The computation of the output produced in the short run is shown below:

As it is given that

AVC i.e average variable cost function = 4.0 - 0.0024Q + 0.000006Q^2

And,

FC i.e fixed cost = $500.

Plus we know that

Total variable cost i.e TVC = AVC × Q i.e Quantity

So,

AVC × Q = TVC

= 4Q - 0.0024Q^2 + 0.000006Q^3

And,

The total cost = Total variable cost + Fixed cost

So,

TC = TVC + FC

= 4Q-.0024Q^2 + .000006Q^3 +$500.

And, the MC i.e marginal cost is

= Total cost ÷ Quantity

MC = 4 - 0.0048Q + 0.000018Q^2

MC = 4

So,

Price = MC i.e 4

4 - .0048Q + .000018Q^2 = 4

So after solving this Q is 266.67 i.e 267 output

6 0

3 years ago