How would this affect the consumption function

Reference no: EM131004201

(The Multiplier with a Proportional Income Tax) Answer the following questions using the following data, all in billions. Assume an MPC of 0.8.

Disposable Income Consumption

$ 0	$ 500
500	900
1,000	1,300
1,500	1,700

a. Assuming that net taxes are equal to $200 billion regardless of the level of income, graph consumption against income (as opposed to disposable income).

b. How would an increase in net taxes to $300 billion affect the consumption function?

c. If the level of taxes were related to the level of income (i.e., income taxes were proportional to in- come), how would this affect the consumption function?

Reference no: EM131004201

Questions Cloud

Regional division of a national retailer : For a popular athletic shoe is nearly constant at 800 pairs per week for a regional division of a national retailer. The cost per pair is $54. It costs $72 to place an order, and annual holding costs are charged at 22% of the cost per unit. The le..

Write essay explaining what skills for managing emotions : Discuss your conflict style(s) and how they affect your communication in the workplace. Write a short essay explaining what skills for managing emotions and conflict you use as aids when you communicate in the workplace or at home

Modified version of the product : Hair Zonemanufactures a brand of hair styling gel. It is considering adding a modified version of the product-a foam that provides stronger hold. Hair Zone's variable costs and prices to wholesalers are:

Discuss how negotiators prepare for negotiations : Discuss how negotiators prepare for negotiations. Explain the distributive and integrative bargaining approaches. How do these methods differ? When would a negotiator likely choose each

How would this affect the consumption function : Assuming that net taxes are equal to $200 billion regardless of the level of income, graph consumption against income (as opposed to disposable income).

Management structure in terms of relationships : Develop an organizational chart for an organization, such as your employer or another company of your choice. This should be limited to senior management groups. Answer the following questions in a paper:

Develop a recruitment plan to fill the position : Develop a recruitment plan to fill the position based on the job description you just developed for both internal and external candidates

Vp of product development at a smaller-sized private : Imagine you are VP of Product Development at a smaller-sized private Generics Pharmaceutical company, with approximately 200 million dollars in annual sales from two generic drugs that focus on the diabetic market. Things have been pretty sweet up..

Differences between public health and healthcare : In your opinion, what are the major differences between public health and healthcare? Explain at least two differences. Based on these differences, do you agree that public health and healthcare are interdependent? Give reasons in support of your an..

User Account

All Pages