Assignment provides you the opportunity to show how much you learnt so far in this course. You only have to pay attention to the following questions and make sure that you do not miss any answer.
- Effect of lower taxes on disposable income
- Effect that the change in disposable income has on consumption
- How taxes are incorporated into the multiplier
- Effect of lower taxes on multiplier
- Effect of lower taxes on AD, GDP, and prices
- Effect of lower taxes on tax revenue
You do not need to use any numerical examples or to perform any calculations. However, you should use the formulas that you learnt to explain the relationships and the magnitude of the change.