Basic three sector model and instead of assuming

Assignment Help Business Economics

Reference no: EM13743901

If we modify our basic three sector model and instead of assuming that taxes are autonomous or fixed in amount (the Tx = Txo assumption) now assume that taxes are a positive function of income, will this modification have the effect of increasing, decreasing, or not changing the size of autonomous spending multipliers (that is, the investment or government spending multiplier)? Note: Feel free to think and apply what you know, or should know, on this question.

1) increases the size of the multipliers

2) decreases the size of the multipliers

3) does not affect the size of the multipliers

Reference no: EM13743901

Questions Cloud

Breakeven percent reduction in labor hours for new system : A large city in the mid-West needs to acquire a street-cleaning machine to keep its roads looking nice year round. A used cleaning vehicle will cost $85,000 and have a $20,000 market (salvage) value at the end of its five-year life.

How use of popular media affect nations historical narrative : how can the use of popular media affect a nation's historical narrative? Can it be used for good? Evil? Or as a tool to educate?

Costs of production and market-structure characteristics : Given the costs of production and market-structure characteristics, analyze how the dem functions under (a) perfect completion and (b) imperfect competition. They will each drive a different approach for maximizing profit and allocation of resources.

Assumptions of the theory of comparative advantage : All of the following are assumptions of the theory of comparative advantage, except

Basic three sector model and instead of assuming : If we modify our basic three sector model and instead of assuming that taxes are autonomous or fixed in amount (the Tx = Txo assumption) now assume that taxes are a positive function of income, will this modification have the effect of increasing, de..

Salaries of public school teachers in a midwestern city : 1. The following regression results relate to a study of the salaries of public school teachers in a midwestern city:

All other factors remaining unchanged : Using the circular flow (inner-tube) model for national income, what would be the effect of an increase in taxes, taken alone (that is, all other factors remaining unchanged)?

Describe the entrepreneurial profile : What is a market niche, and how does it apply to Taza's business model? What types of companies compete with Taza? What role has technology played in Taza's success? Describe the entrepreneurial profile. In what ways does Larry Slotnick display these..

User Account

All Pages