If Congress votes to increase spending and taxes by the same amount, what is the effect on employment and interest rates

Answers

Answer 1

Answer:

a. Increase / Increase

Explanation:

Since in the question it is mentioned that there is an increase in taxes and government spending so it represents the positive stimuls as it occurs because the government incurrent all the revenue for the public welfare due to which there is a rise in the government expenditure that boost the aggregate demand also the GDP value would be rise because of the multiplier effect

Therefore the employment level and the rate of interest would also increased

Answer 2

Answer:

The correct answer was increase / no change

Explanation:

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Related Questions

A firm has a tax burden of 0.6, a leverage ratio of 1.2, an interest burden of 0.7, and a return-on-sales ratio of 14%. The firm generates $2.64 in sales per dollar of assets. What is the firm's ROE

Answers

Answer:

18.63%

Explanation:

Calculation for the firm's ROE

Using this formula for

ROE=(Tax burden)(Leverage ratio)(Interest burden)(Return-on-sales ratio)(Sales per dollar of assets)

Let plug in the formula

ROE = (.6)(1.2)(.7)(.14)(2.64)

ROE=18.63%

Therefore the firm's ROE is 18.63%

The Bureau of Labor Statistics counts as employed people who work part-time, but would prefer to work full-time. Suppose the people who had part-time jobs, but wanted full-time jobs, were counted as unemployed. Explain how the unemployment rate and the labor force participation rate would change.

Answers

Answer:

The labor participation rate would not change because it counts the labor force as a percentage of the total adult population, and the labor force includes both the number of people employed and the number of people unemployed, so, even if those working part-time were counted as unemployed by the BLS, they would still be part of the Labor Force.

The labor participation rate formula is:

Labor Participation Rate = (Labor Force / Total Adult Population) x 100

The unemployment rate would indeed change, because it counts the number of unemployed as a percentage of the labor force. If those working part-time were counted as unemployed by the BLS, the number of people unemployed would obviously spike.

The formula is:

Unemployment Rate = (Number of Unemployed / Labor Force) x 100

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