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2 years ago

Cutting taxes

Business

2 answers:

gladu [14]2 years ago

8 0

Answer:

The answer is D) will raise disposable income and raise spending

Explanation:

When taxes are cut disposable income increases as there is less income used to pay taxes. If there is a higher amount of disposable income available then spending will increase as well as spending appetite.

Cutting taxes is a easy way to stimulate spending in an economy.

The correct answer is therefore D) will raise disposable income and raise spending.

Cutting taxes can also increase aggregate demand which can lead to higher economic growth as well.

nadya68 [22]2 years ago

7 0

Answer:

D) will raise disposable income and raise spending

Explanation:

Base on the scenario been described in the question, cutting the taxes will raise the income been depose and also increase the spending rate. This is so because by cutting the taxes, individual will have more money when the tax is been cut.

We can define A tax cut is a decrease in the rate of tax that is been charged by a government. The immediate effects of a tax cut are a government reduction in the real income and an raise in the real income of the people whose tax rates have been reduced.

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Natali5045456 [20]

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2 years ago

Consider a small country that is closed to trade, so its net exports are equal to zero. The following equations describe the eco

inna [77]

Answer:

1. Aggregate output demanded is $500 billion. True.

Aggregate Demand (Y) = C + G + I

Y = 40+0.9∗DI + 80 + 20

Y = 40 + 0.9 ∗ (Y−100) + 80 + 20

Y = 50 + 0.9Y

0.1Y = 50

Y = $500 billion

2. Suppose the government decides to increase spending by $10 billion without raising taxes. Because the expenditure multiplier is 10. True.

Expenditure Multiplier = 1 / ( 1 - Marginal Propensity to Consume)

Marginal Propensity to Consume = 0.9 as per the Consumption function.

= 1/ ( 1 - 0.9)

= 10

2. b. this will increase the economy's aggregate output demanded by $100 billion. True.

Change in Aggregate output = Increase in government expenditure * expenditure multiplier

= 10 billion * 10

= $100 billion

3. ... In this case, the economy's aggregate output demanded is $500 billion . True.

Aggregate Demand (Y) = C + G + I

Y = 40+0.9∗DI + 80 + 20

Y = 40 + 0.9 ∗ (0.80∗Y) + 80 + 20

Y = 140 + 0.72Y

0.28Y = 140

Y = $500 billion

4. Given an income tax of 20%, the expenditure multiplier is approximately 3.6. True.

As a result of the new tax, the MPC will become;

= 0.9 * ( 0.80 * Y)

= 0.72Y.

Expenditure Multiplier = 1 / ( 1 - Marginal Propensity to Consume)

= 1/ ( 1 - 0.72)

= 3.57

= 3.6

4. b. Therefore, if the government decides to increase spending by $10 billion without raising tax rates, this would increase the economy's aggregate output demanded by approximately $36 billion. True.

Change in Aggregate output = Increase in government expenditure * expenditure multiplier

= 10 billion * 3.6

= $36 billion

5. A $10 billion increase in government purchases will have a larger effect on output under a fixed tax of $100 billion. True.

When the tax was fixed, an increase in Government purchases of $10 billion resulted in an increase in Aggregate output of $100 billion. When the Government switched to income taxes however, a $10 billion increase in Government spending led to a significantly lesser increase in Aggregate output of $36 billion.

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3 years ago

Which of these are reasons for the increase in ethical violations among business leaders in the 21st century?

pychu [463]

Answer: The following are reasons for increase in ethical violations among business leaders in the 21 century:

1. The 24/7 news cycle place a more scrutiny on unethical behaviour.

2. Globalization allows business to operate in region where ethical risk are greater.

3. Digital communication are more susceptible to hackers and whistle blowers.

Explanation:

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3 years ago

Why are discounted cash flow methods of making capital budgeting decisions superior to other methods?

Katyanochek1 [597]

Answer:

Discounted cash flow strategies consider the time value of the currency and consider all future cash flows.

Explanation:

Discounted cash flow approaches recognize the value of money, and take into consideration all investment returns, unlike other traditional capital budgeting approaches.

Discounted cash flow is an accounting tool used to measure an investment's worth based on its future revenues.

Discounted Cash Flow analyses are trying to figure out the value of the company now, based on estimates of how much revenue it will make in the future.

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