Advertisements
Advertisements
प्रश्न
Suppose marginal propensity to consume is 0.75 and there is a 20 per cent proportional income tax. Find the change in equilibrium income for the following (a) Government purchases increase by 20 (b) Transfers decrease by 20.
Advertisements
उत्तर
In case of proportional taxes
(a) `DeltaY=1/(1-c(1-t))xxDeltaG`
MPC = 0.75 and ΔG = 20
`=1/(1-0.75(1-0.2))xx20`
`=1/(1-0.75xx0.8)xx20`
`=20/(1-0.60)`
`=20/0.4=50`
(b) Transfer decreased by 20
`DeltaY=c/(1-c)xxDeltaT`
`=0.75/(1-0.75)xx20`
`=0.75/0.25xx20=60`
APPEARS IN
संबंधित प्रश्न
We suppose that C = 70 + 0.70Y D, I = 90, G = 100, T = 0.10Y (a) Find the equilibrium income. (b) What are tax revenues at equilibrium Income? Does the government have a balanced budget?
Explain why the tax multiplier is smaller in absolute value than the government expenditure multiplier.
Does public debt impose a burden? Explain.
Discuss the issue of deficit reduction.
Regressive tax is that which is ______.
The primary deficit in a government budget is ______.
| S. No. | Content | Rs (in crores) |
| 1. | Revenue Expenditure | 100 |
| 2. | Capital Receipts | 40 |
| 3. | Net Borrowings | 38 |
| 4. | Net Interest Payments | 27 |
| 5. | Tax Revenue | 50 |
| 6. | Non-tax Revenue | 15 |
Which of the following is MOST LIKELY to be the main contributor to the fiscal deficit in this case?
Read the following statements carefully and choose the correct alternatives given below:
Statement 1: Fiscal Deficit = Total Budget Expenditure - Total Budget Receipts (Net of borrowing)
Statement 2: Primary Deficit = Fiscal Deficit + Interest Payments.
______ in the budget is an important measure of deficit.
What is relation between government deficit and government debt?
Which of the following statements are correct
Statement 1: Fiscal deficits are not necessarily inflationary; though, they are generally regarded as inflationary.
Statement 2: When the government expenditure increases and tax reduces, there is a government deficit and there will be a corresponding increase in the aggregate demand.
If India exports goods worth ₹20 crores and imports goods worth ₹30 crores, it will have a ______
Which of the following points are related to the current alarm?
Identify the correctly matched pair of the items in Column A to those in Column B:
| Column A | Column B | ||
| 1 | Fiscal Deficit | (a) | Other than interest payments |
| 2 | Primary Deficit | (b) | Borrowings less interest payments |
| 3 | Revenue Deficit | (c) | Borrowings |
| 4 | Tax Deficit | (d) | Borrowings in government budget |
Which of the following statements is true?
Primary deficit is borrowing requirements of government for making:
Identify which of the following statements is true.
