Beneficial for long run economic growth

Assignment Help Macroeconomics
Reference no: EM132606900

Some years ago, the Federal government cut the GST (the federal sales tax on goods and services which Ontario later blended into the PST to create the HST) by two percentage points. The federal government could have transferred this cut to income taxes instead, i.e. it could have decreased taxes on income instead of on the GST. Sources of income that taxes are paid on include labour (work) as well as investment earnings. Assuming that taxes are to be cut, which tax cut do you believe is more beneficial for long run economic growth, a GST/HST reduction or an income tax reduction? Assume that either of the reductions would be revenue neutral, i.e., the federal government would forfeit the same amount of revenue with either tax that is cut.

Reference no: EM132606900

Questions Cloud

Research design is art and science of conducting studies : Research design is the art and science of conducting studies that maximize reliability and validity of the findings and minimize bias or error
Components of macroeconomic aggregates : Now that you have segmented the components of macroeconomic aggregates, explain their implications on the national economy.
What are the different types of auditor opinion : What are the different types of auditor's opinion, briefly explain? Identify which type of opinion is given below for Delta Company?
What happens to the price level and rgdp levels : Suppose at the same time as Parliament pursues an expansionary fiscal policy, the Bank of Canada pursues expansionary monetary policy.
Beneficial for long run economic growth : Some years ago, the Federal government cut the GST (the federal sales tax on goods and services which Ontario later blended into the PST
How is dominant ideology reflected in media : How is the dominant ideology reflected in the media? Explain. What has been your experience with "groupthink"?
Outline evaluation of the dispute : Outline your evaluation of the dispute and the effectiveness of the resolution strategies (SITXCOM005 Manage conflict) (Cert 3 Commercial Cookery)
What is the money multiplier : The reserve ratio of country Alpha is 12%. John makes a bank deposit $200 in Bank Gamma
Prepare the entries for the declaration and issuance : Coronado Corporation has 51,000 shares of $13 par value common stock outstanding. Prepare the entries for the declaration and issuance

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd