Gov. Expend. Tax rev. 170 90 450 170 110 550 170 130 650 170 150 750 170 170 850

Question

Gov. Expend. Tax rev. 170 90 450 170 110 550 170 130 650 170 150 750 170 170 850 Refer to the accompanying table for Waxwania. a. What is the marginal tax rate in Waxwania? percent The average tax rate?________ percent b. Suppose Waxwania is producing $550 of real GDP, whereas the potential real GDP (or full-employment real GDP) is $650. How large is its budget deficit?_____ $ Its cyclically adjusted budget deficit?____ $ Its cyclically adjusted budget deficit as a percentage of potential real GDP? Instructions: Round your answer to two decimal places. ______percent

Explanation / Answer

Cyclically adj budget = $40 (170-130) Budget deficit of potential real GDP 6.15 (650)=40/650*100

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