Differences between fixed and variable taxes

Reference no: EM1375627

Question: Discuss fiscal policy and identify the ways in which government can influence the economy.

Question: Determine the differences between fixed and variable taxes and provide examples of each.

Question: Assume that the government decreases spending by one hundred billion dollar. What happens to aggregate demand? What is the likely effect on prices and output? Where are the new equilibrium price level and GDP relative to the old levels? Could you give me a graph???? If not that's okay. The graph helps me visualize the problem.

Question: Assume that the government decreases taxes by 20 percent. Describe the effects to the equilibrium price level and GDP. Please address consumption, disposable income, and aggregate demand in your answer.

Question: Assume that the government reducing spending by $20 billion. How much will this change equilibrium GDP if the MPC is 80 percent and the tax rate is 1/6 (16.6%)? Could you do a graph for this as well?

Reference no: EM1375627

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