CHAPTER 17 1. (2.5 points) For the descriptions in a. through e. below, provide the name of the federal tax that would apply (choose from the following options: individual income tax, corporate income tax, excise tax, payroll tax, estate and gift tax). a. a tax on personal income that is due every year on April 15 (or the first business day after) b. the government assesses a tax on a lump sum of $600 million in assets which is about to be passed from one generation of a family to another c. a company makes profits of $500 million in 2022, which are then taxed d. the federal government wants to discourage consumption of gasoline and diesel fuel, so it taxes their sales at a rate of 18.4 cents and 24.4 cents per gallon, respectively e. a tax captured in social insurance and retirement receipts, which then provides funds for Social Security and Medicare 2. (0.5 points) Read carefully: if your household's income increases and you are subject to a progressive tax system, what will happen to the percentage (or rate) of your income that is taxed? 3. (0.5 points) Above a certain limit, people with higher incomes pay a smaller share of their income in tax under the Social Security payroll tax. In effect, this means that above that limit, the Social Security payroll tax is progressive / proportional / regressive (choose one of the underlined options). 4. (1.5 points) For each of the following situations a. through c., answer by stating whether expansionary or contractionary fiscal policy would be more appropriate a. The economy is experiencing a recession, and equilibrium in the AD/AS model is occurring at a quantity of output below potential GDP. b. An extremely high level of aggregate demand has generated inflationary increases in the price level and created an equilibrium in the AD/AS model where real output is above potential GDP. c. Unemployment has risen in the economy and aggregate demand is well below the full-employment level of output.5. (\"I point) Briey explain how an automatic stabilizer {either on the tax side or spending side of fiscal policy} can decrease inationary pressure in a booming economy where aggregate demand has risen sharply. CHAPTER 13 E. (2 points} For partial credit, show your work. In a country, private savings equals BUD, the government budget surplus equals 49, and the trade surplus equals T9. What is the level of private investment {I} in this economy? T. {2 points} For partial credit, show your work. In a country, private investment equals 1'45, the government budget decit equals 25D {in other words, public savings equals 25D), and the trade surplus equals 22D. What is the level of private savings {5) in this economy? 8. {2 points} For partial credit, show your work. Suppose that it is the year 1999 and the US. government has a budget surplus, although the US. economy is still experiencing a trade decit. Private savings equals 419, the government surplus equals 299, and private investment equals 92D. What is the level of the trade decit (llX} in this economy? 9. (3 points} For partial credit, show your work. Assume an economy has a budget surplus of 1,9[l-l], private savings of 2,4, and investment of 3,400. a. Write out a national saving and investment identity for this economy. b. What will be the balance of trade in this economy? c. If the budget surplus changes to a budget decit of 1,90D, with private saving and investment unchanged, what is the new balance of trade in this economy? CHAPTER 2D 1D. (1.5 points) Canada and Mexico are two of the United States' largest trading partners. Choose either Canada or Mexico and name a product or service for which your chosen country has a comparative advantage in production, compared to the United States. Complete your answer by lling in the blanks below. Name of country: The good being produced: Reason for comparative advantage: 11. (3.5 points) Using 100 worker hours, Sweden can produce 20 quarts of berries or 25 tons of lumber. In contrast, using 100 worker hours Finland can produce 15 quarts of berries or 10 tons of lumber. a. Which country has the absolute advantage in producing berries? b. Which country has the absolute advantage in producing lumber? c. What is the opportunity cost of producing one quart of berries in Sweden? d. What is the opportunity cost of producing one quart of berries in Finland? e. Which country has comparative advantage in producing berries? f. In which product (berries or lumber) should Finland specialize? g. In which product (berries or lumber) should Sweden specialize