Purchase Solution

Effects Of Imposing A Progressive Tax

Not what you're looking for?

Ask Custom Question

Impose a progressive tax such that the tax rate is 0 percent when GDP is $100, 5 percent at $200, 10 percent at $300, 15 percent at $400 and so forth. Determine and graph the new consumption schedule, noting the effect of this tax system on the MPC and the multiplier.

GDP (billions)....................Consumption (billions)
.......100..........................................120
.......200..........................................200
.......300..........................................280
.......400..........................................360
.......500..........................................440
.......600..........................................520
.......700..........................................600

Purchase this Solution
Solution Summary

Effects of imposing a progressive tax on economies of different marginal propensities to consume.

Solution Preview

Please see the attached file.

The tax rate is given in column E. We can calculate the new level of consumption by ...

Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

View More Free Quizzes
Related BrainMass Solutions

  • Effects of imposing Proportional and Progressive Tax

    123255 Proportional and Progressive Tax Proportional and Progressive Tax. See attached file for full problem description. Progressive and proportional taxes are a form of automatic stabilizers.

  • Corporate Tax Liability

    The Tax Policy Center references that, "The United States imposes a [progressive] tax on the profits of U.S. resident corporations at graduated rates ranging from 15 to 35 percent. Most corporate income is taxed at the maximum rate.

  • Progressive approach to discipline

    This approach does not support reprimanding or imposing penalty on employee for any kind of misconduct. The approach focuses on the fixation of problem of employee.

  • Lump-sum taxes

    On the other hand a progressive tax charges a higher rate of tax to a person with a higher level of income.

  • Circular flow of goods and services

    A more progressive tax scheme, while lowering economic growth, would therefore maximize social welfare.

  • progressive discipline procedure

    When imposing positive and progressive discipline, the manager should understand that she is not exercising the employment at will option but is providing a chance to the employee. The typical progressive discipline procedures are: 1.

  • Approaches to Discipline

    The progressive discipline procedure is usually formalized by some companies so that there is a recognition and application of the proper level of disciplinary action.

  • Explaining Progressive Taxation

    The perception that the privileged members of society are 'paying their share' is key to the acceptance of a progressive tax.

  • Financing the Affordable Care Act

    This means that you as a taxpayer will also be paying for this bill.

View More Related Solutions