Currently the government of Ricardia has outlays equal to $100 billion, and a tax scheme that is related positively to real GDP by the following equation: Taxes = $25 billion + 0.1real GDP) .What is the real GDP when the government has a balanced budget?
A) $250
B) $1,250 billion
C) $750 billion
D) $100
E) $1,000 billion
Correct Answer:
Verified
Q36: An increase in income taxes
A)decreases potential GDP
Q37: An increase in income tax _ potential
Q38: A tax cut on capital income
A)does not
Q39: Consider all the effects of fiscal policy.A
Q40: Suppose the tax rate on interest income
Q42: Suppose that in China, investment is ¥400
Q43: Currently the government of Ricardia has outlays
Q44: The cyclical deficit
A)exceeds the structural surplus.
B)is a
Q45: A tax on labour income
A)decreases the supply
Q46: If the economy is in an expansion,
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