Since government spending is one of the components of aggregate demand, an increase in government spending will shift the demand curve to the right. A reduction in taxes will leave more disposable income and cause consumption and savings to increase, also shifting the aggregate demand curve to the right.
Q. What will most likely happen after the government increase taxes?
Which of these is MOST LIKELY to occur after the government increases taxes? The government collects taxes to fund programs as well as to reduce debts and deficits. At the same time, higher taxes mean that consumers have to give more money to the government.
Table of Contents
- Q. What will most likely happen after the government increase taxes?
- Q. What consumer behavior is the Federal Reserve Board trying to encourage when it implements an expansionary monetary policy?
- Q. Why Raising corporate taxes is bad?
- Q. How does lowering taxes affect the economy?
- Q. Why do you pay more taxes when you make more money?
- Q. How much income puts you in a higher tax bracket?
Q. What consumer behavior is the Federal Reserve Board trying to encourage when it implements an expansionary monetary policy?
unit 5 econ
| Question | Answer |
|---|---|
| What consumer behavior is the Federal reserve board trying to encourage when it implements a loose monetary policy? | decreased saving and increased spending |
| which action by the Federal Reserve would help to slow down rising inflation? | sell bonds |
Q. Why Raising corporate taxes is bad?
Corporate income taxes are the most harmful for economic growth. High corporate tax rates divert investment away from the corporate sector, curtailing investment that would raise the productivity of American workers and increase those workers’ real wages.
Q. How does lowering taxes affect the economy?
In general, tax cuts boost the economy by putting more money into circulation. They also increase the deficit if they aren’t offset by spending cuts. As a result, tax cuts improve the economy in the short-term, but, if they lead to an increase in the federal debt, they will depress the economy in the long-term.
Q. Why do you pay more taxes when you make more money?
As you earn more money from your job, you’ll pay higher rates of tax on your additional income.
Q. How much income puts you in a higher tax bracket?
If your taxable income for 2020 is $50,000 as a single filer, that puts you in the 22% tax bracket, because you earn more than $40,125 but less than $85,525. This is known as your marginal tax rate. Marginal tax rate is the tax rate you pay on your last dollar of income; in other words — the highest rate you pay.
