Economics, please do all these and show me the formula and such on how you did i

Question

Economics, please do all these and show me the formula and such on how you did it. Thanks

In the country of Pythia, the marginal propensities to consume are related to income as shown by the chart in the table below. Assume the government of Pythia needs to pursue expansionary fiscal policy. Instructions: Round all answers to two decimal places. a. If tax cuts are given to every income bracket, what is the value of the taxation multiplier in each bracket? Fill in the value in the table below. b. Suppose the government increases spending on infrastructure. What is the value of the government -spending multiplier in each bracket? Fill in the value in the table below. Marginal propensity Total yearly income tax Government -spending income range (5) to consume Taxation multiplier (S In millions) (MPC) (%) 0-15,000 0.95 5,000 10 15,001-30,000 0.85 10,000 13 30,001-45,000 0.75 20,000 16 45,001-60,000 0.65 40,000 19 60,001-75,000 0.55 80,000 22 75,001-90,000 0.45 160,000 25 90,001 and above 0.40 1,000,000 30

Explanation / Answer

Tax multiplier = -MPC/(1-MPC(1-Tax rate))

Government exp multiplier = 1/(1-MPC(1-Tax rate))

Income Range MPC Income Income Tax Tax multiplier Government Spending multiplier 0-15000 0.95 5000 10 6.551724138 6.896552 15001-30000 0.85 10000 13 3.262955854 3.838772 30001-45000 0.75 20000 16 2.027027027 2.702703 45001-60000 0.65 40000 19 1.372756072 2.111932 60001-75000 0.55 80000 22 0.963222417 1.751313 75001-90000 0.45 160000 25 0.679245283 1.509434 90001-above 0.4 1000000 30 0.555555556 1.388889

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