The income tax is:
A. an automatic stabilizer because income tax revenues fall as income increases, accelerating an economic expansion.
B. an automatic stabilizer because income tax revenues rise as income increases, slowing an economic expansion.
C. not an automatic stabilizer.
D. an automatic stabilizer because income tax revenues rise as income increases, accelerating an economic expansion.
Answer: B
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Refer to Table 20.1. George is a single taxpayer with an income of $65,000. If George had received a raise of $3,500 at the beginning of the year, he would have paid an additional ________ in income tax
A) $665 B) $945 C) $1,000 D) $1,330
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real GDP and the monetary base in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. Real GDP rises and monetary base rises. b. Real GDP rises and monetary base falls. c. Real GDP and monetary base fall. d. Real GDP and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.