Question

1a. Does every dollar spent have an “equal” influence on an economy, why or why not?...

1a. Does every dollar spent have an “equal” influence on an economy, why or why not? Does every dollar spent have an “equal” impact on GDP? Are these two questions different? Explain.

1b. Explain (with a paragraph or two) why the concept/idea of taxes is good for our country. What would happen if we were a society without taxes?

Homework Answers

Answer #1

a)

Every dollar spent does not have equal influence on an economy. Influence of every dollar on economy depends on whether it is spent on productive activities or unproductive activities. Dollar spent on productive activities would have disproportional influence on economy.

Impact of every dollar spent on economy depends on consumption level or marginal propensity to consume( MPC). Impact shall be larger if level of MPC is larger.

b)

Idea of taxes is good for economy. Taxes assist in collecting revenue for government and further, taxes are used to establish just and equitable society.

Society would not have provision of public goods in absence of taxes. people would not be ready to voluntarily contribute towards the cost of public goods and there would be underproduction of public good.  

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1a. In what type of industry does a natural monopoly arise? A. An industry that produces...
1a. In what type of industry does a natural monopoly arise? A. An industry that produces a good and service considered a necessity by consumers. B. An industry with patents. C. An industry with very high variable costs. D. An industry with very high fixed costs. 1b. Explain. 2a. Natural monopolies COULD arise in each of the following industries EXCEPT A. the internet service industry. B. the pharmaceutical industry. C. the fashion industry. D. the airline industry 2b. Why? 3....
The Kingdom of Wrigley is an archipelago in the South Pacific. The economy is based on...
The Kingdom of Wrigley is an archipelago in the South Pacific. The economy is based on fishing and agriculture, and currently imports more than it exports. The economy is doing well right now, but not great, and the banking system is stable yet fragile. The central bank is not independent and follows the instructions of The King. The King, wanting new economic ideas, and having been told you took a macroeconomics class before moving to the Kingdom, invites you to...
1A )Choose the false statement: A) Genes that are carried by current species will have no...
1A )Choose the false statement: A) Genes that are carried by current species will have no impact on the evolutionary pace or direction of future life; hence, regardless of what kinds of changes in biodiversity are brought on by climate change, the potential for new life forms remains infinite. B) A modern-day extinction, as is occurring today due to climate change, will probably result in a loss of biodiversity rather than a new explosion of diversity as occurred in the...
The Republican tax cut has been in the news. The tax cut which, on net, is...
The Republican tax cut has been in the news. The tax cut which, on net, is set to increase the deficit by $1.5 trillion over the next ten years is the focus of this question. A) One important thing to keep in mind is that the economy is already essentially at potential with unemployment at 4.1%. Assume that the economy is in long run equilibrium before the tax cut. What will happen to the US economy in the short run?...
Answwer the Following Question Why is the film called ESCAPE FIRE? How is the idea of...
Answwer the Following Question Why is the film called ESCAPE FIRE? How is the idea of an “escape fire” a metaphor for the message in the film? What are the proposed “escape fires” for the healthcare crisis in the film? THE PROBLEMS: PAYING MORE, GETTING LESS 75% of the 2.7 trillion dollars we spend on healthcare in this country is spent on treating diseases that are largely preventable, such as heart disease and diabetes. Why do you think this is...
1. In which phase of the business cycle is the U.S. economy currently in? ________________. How...
1. In which phase of the business cycle is the U.S. economy currently in? ________________. How many months has the U.S. economy been in this stage of the business cycle? ___________ months 2. How long has the current expansion/recovery lasted to date? _________________ How does this compare to the average length of U.S. recessions since 1854? ______________________________. 3. What do the last four recoveries/expansions (that is, the current recovery/expansion and the previous three recovery/expansions), suggest about a new trend in...
Economists in Fundlandia, a closed economy, have collected the following information about GDP and public savings...
Economists in Fundlandia, a closed economy, have collected the following information about GDP and public savings in their country: Y = 1000 G = 100 T = 100 They further estimate that national savings and investment are governed by the following expressions: S = 150 + 50*r I = 600 - 100*r Where r is the country's real interest rate in % terms (thus if you find r = 5, then r is 5%). Problem Set #2 - Part II...
Can I have your opinion on this research and possible correction? The global economy and government’s...
Can I have your opinion on this research and possible correction? The global economy and government’s ability to control its country’s currency. Definition of terms Global economy is an economic interdependence established between the most influential countries that drives the worldwide economic environment. It is also the aggregate economic output, movement and influence of all countries. (My Accounting course). Currency is the medium of exchange for goods and services. In short, its money, in the form of paper or coins,...
[1] The basic problem that gives rise to the study of economics is the need to:...
[1] The basic problem that gives rise to the study of economics is the need to: A) control the effects of actions by foreign governments. B) be sure all the goods and services produced in an economy get sold. C) use scarce resources to satisfy people's unlimited material wants and needs. D) control people's tastes and wishes so that the available resources can produce all the goods and services they want. [2] Economics is concerned with: A) earning as much...
All else equal, an increase in customers' reservation prices will have what effect on the value...
All else equal, an increase in customers' reservation prices will have what effect on the value generated by a business? It will be unaffected It will decrease It will increase Question 2 An increase in the value of resources in an alternate use will have what effect on the ability of a company to generate value using those resources? it will be unaffected It will decrease It will increase Question 3 Which sequence of planning communication is most appropriate? Analyze...