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What do governments do to stabilize the economy?
Progressive taxes. When economy is in a boom, income of people increase, tax collected increases, alleviates the huge rise in consumption. Tax revenue of government also increases. When economy is facing recession, unemployment results and amount of taxes government collect will reduce due to the lowered income. Government can then use the tax revenue collected previously to induce spending through the use of Govenment expenditure or welfare benefits
If disposable income increases in a economy what can be true?
savings decrease
If a good is a normal good what will happen to its consumption as income increases?
The definition of a Normal Good is: a good that will increase in consumption as income increases and decrease in consumption as income decreases.
What is underground economy?
products and income that are not reported as income to the government
Does an increase in government spending increase income?
An increase in government spending helps to stimulate an economy. Because the government is now paying other people to do work, those people are now receiving an income. They can then reinvest in the economy, leading to an overall growth in the nation's economy.
What do governments do to stabilize the economy?
Progressive taxes. When economy is in a boom, income of people increase, tax collected increases, alleviates the huge rise in consumption. Tax revenue of government also increases. When economy is facing recession, unemployment results and amount of taxes government collect will reduce due to the lowered income. Government can then use the tax revenue collected previously to induce spending through the use of Govenment expenditure or welfare benefits
If disposable income increases in a economy what can be true?
savings decrease
What happens to a net personal income with the government lowers taxes?
If the government lowers your taxes your NET income increases.
If a good is a normal good what will happen to its consumption as income increases?
The definition of a Normal Good is: a good that will increase in consumption as income increases and decrease in consumption as income decreases.
What happens to net personal income when the government lowers taxes?
your net income increases, but your income tax decreases
What happens to net personal income when government lowers taxes?
your net income increases, but your income tax decreases
What is underground economy?
products and income that are not reported as income to the government
Does an increase in government spending increase income?
An increase in government spending helps to stimulate an economy. Because the government is now paying other people to do work, those people are now receiving an income. They can then reinvest in the economy, leading to an overall growth in the nation's economy.
Is there a constitutional basis for the American government to charge an income tax?
To this day, there here is a constitutional basis that definitely states for the American government is to charge an income tax. In the United States tax is determined by applying a tax fee which increases as income increases.
What is effect on industry?
In the environment, it obviously contribute to the pollution. For people, it provides employment. For the economy, it increases the income of the country.
How does specialization affect the economy?
Specialization increases an individual or groups productivity (and income) according to the principle of comparative advantage.
What are the two ways the federal government could respond to an increase in the economy?
raise income taxes and decrease government spending
