PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Chapter 6, Problem 4P
To determine
Identify the adjustment in the income tax schedule in 2016.
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Last year you bought a house for $200,000, and you sell the house this year for $230.000. Unfortunately, the government makes you
pay taxes on your capital gains. Assume that the capital gains tax rate is 20%. Over the year, the CPl increased from 110 to 115.5.
Your after-tax real return is
%.
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Part 2 (1 point)
%
Suppose that the CPI increased from 110 to 121. What is your after tax real return now?
Consider the following hypothetical tax schedule, expressed in nominal terms, for the tax year 2021-22.
Assuming the CPI is 100 in 2021-22 and 125 in 2022-23, but the government does not adjust the tax schedule for tax year 2022-23, what is the average tax rate in 2022-23 for a household earning $48,000 in 2021-22, assuming their nominal income goes up with inflation?
15%
10%
9.1%
8.6%
7.7%
Suppose a person works hard at a job after graduation and after her first year, her effort is rewarded with a 3% raise when the average wage increase in her company is 2%. Later, the government releases its inflation report and says that the inflation rate is 7%.
Given this information, which of the following is true regarding her standard of living?
Her standard of living has improved because the 3% raise is enough to offset the average rise in prices.
Her standard of living did not improve because the purchasing power of
her income is less than it was last year.
Her standard of living has remained the same because the rate of inflation does not influence purchasing power.
Her standard of living has increased by the amount of inflation, namely, 7%.
Chapter 6 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
Ch. 6 - Prob. 1RQCh. 6 - Prob. 2RQCh. 6 - Prob. 3RQCh. 6 - Prob. 4RQCh. 6 - Prob. 5RQCh. 6 - Prob. 6RQCh. 6 - Prob. 7RQCh. 6 - Prob. 8RQCh. 6 - Prob. 1PCh. 6 - Prob. 2P
Ch. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Prob. 7PCh. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - Prob. 10PCh. 6 - Prob. 6.1CCCh. 6 - Prob. 6.2CCCh. 6 - Prob. 6.3CCCh. 6 - Prob. 6.4CCCh. 6 - Prob. 6.5CCCh. 6 - Prob. 6.6CCCh. 6 - Prob. 6.7CCCh. 6 - Prob. 6.8CCCh. 6 - Prob. 6.9CC
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