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Suppose companies can deduct interest payments on their debt against their taxable income: they pay tax on pro?ts, net of interest payments on debt. The revenue that a com- pany generates from some new investment is taxed, but it can be offset by depreciation of the capital. Suppose the government introduces a 100% deprecation allowance so that com- panies can immediately deduct all investment spending from taxable pro?t. But to offset this very generous measure, they set the corporate tax rate at a high level of 60%. Is the resulting tax system advantageous or disadvantageous to investment-take as your benchmark a situ- ation with no taxes at all. Assume companies use debt to ?nance investment.
What is the most common way modern labor unions use to raise wages? This will result in the fewest jobs lost if labor demand is elastic or inelastic?
If you can enter only one market, and the cost of entering the market is $250,000, should you enter one of the European markets. If you enter, what is your potential profit.
Suppose 2 firms are found on the real line [0,1]. Firm 1 is located at a=.15, and Firm 2 is located at 1-b, where b=.15. Assume P1=P2=$10. Consumers face a distance cost of $2 per square unit of distance. What can you infer about the market share of ..
What was the equilibrium price in market before the tax and what is the amount of the tax and how much will the buyer pay for the product after the tax is imposed?
If the economy currently has a frictional unemployment rate of 2 percent, structural unemployment of 2 percent, seasonal unemployment of 0.5 percent, and cyclical unemployment of 2 percent, what is the natural rate of unemployment? Where is the ec..
A machine was installed five years ago. Its market value is now $15000 and is expected to decline by 10%/ year over the next five years. It is projected that this machine will be operational for another five years, after which time it will be scrappe..
What are the advantages of inflation targeting - what are the disadvantages of inflation targeting?
france can gain specialization and trade as it recieves more than __________( 7lbs,1lb,4lbs,1/4lb,1/7lb)of fish per each bottle of wine it exports to austrailia.similarly australia can gain from trade as long as it recieves more then _______(4 blo..
Principles of economics for evaluating and assessing the need for the public health initiative - A brief description of whether the initiative is a micro or macroeconomic program
Derive the short-run cost function - Derive the total surplus and briefly explain how and why the prices differ under different market structures.
Explain in words why equilibrium GDP changes
Bob hits Sally with a shovel. In this situation, which of the following is the mens rea - key element of classic experimental design?
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