Is this tax credit progressive or regressive why

Assignment Help Finance Basics

Reference no: EM131296760

Public Finance Questions:

1. A community's utility is U= √(VxE), where V is private goods spending in $ thousands and E is education spending in $ thousands. The community has a total budget of $2 million. The price of a unit of private goods is $1,000 and the price of a unit of education is $1,000.

a. What is the community's equilibrium level of private goods and education spending? Graph the budget constraint and indifference curve, labeling the equilibrium in your graph with spending on the axes in thousands of dollars.

b. Suppose the community receives a matching grant from the state of $1 for each $1 of spending by the local community. What is the community's equilibrium level of private goods and education spending with the matching grant? Graph the new budget constraint and indifference curve, labeling the equilibrium in your graph with spending on the axes in thousands of dollars.

c. Suppose that, instead of the matching grant, the community receives a $500,000 block grant from the state. What is the community's equilibrium level of private goods and education spending with the block grant? Graph the new budget constraint and indifference curve, labeling the equilibrium in your graph with spending on the axes in thousands of dollars.

d. Would this community prefer the matching grant or the block grant? Why?

2. Donations to the Alabama Opportunity Scholarship Fund (AOSF) qualify as tax credits rather than tax deductions.

a. Why would the State of Alabama qualify AOSF donations as tax credits rather than tax deductions?

b. Is this tax credit progressive or regressive? Why?

3. Describe the externalities argument for distributing money from one community to another. Provide an example of this kind of redistribution based on externalities. (your example needs to be "real world" and pertain to Alabama directly).

Reference no: EM131296760

Questions Cloud

Does sue have a social responsibility to hire her friends : Sue has several friends at Texas College who would like a part-time job at the health club.- Does Sue have a social responsibility to hire her friends?

Describe your firms policies on its social responsibility : Should she fire the trainers? Describe your firm's policies on its social responsibility toward its community and the environment.

Policies that encourage employees ethical behavior : Does your firm mention any specific policies that encourage employees' ethical behavior? Does the firm give any specific examples of how it accomplishes these goals?

Review a job description through a job website : Review a job description through a job website (e.g., Career Builder, Monster, etc.) in your desired career field and identify at least five skills you have obtained through your general education courses that will make you successful at this job.

Is this tax credit progressive or regressive why : Donations to the Alabama Opportunity Scholarship Fund (AOSF) qualify as tax credits rather than tax deductions. Why would the State of Alabama qualify AOSF donations as tax credits rather than tax deductions? Is this tax credit progressive or regress..

How business uses technology to enhance business ethics : Explain how the business uses technology to enhance its business ethics and social responsibility.- Does it provide a place for customer complaints on the Internet?

Examples of the major types of analytical modeling : What are the trends of customer relationship management? List and briefly discuss the main three category of e-commerce application?What are the essential processes of e-commerce? What are the activities and examples of the major types of analyti..

What kinds of technology are involved in the phenomena : What kinds of resources are allocated toward monitoring these phenomena and why?What types of Web resources monitor the phenomena and provide up-to-date information about them?What kinds of technology are involved in monitoring the phenomena?

How the sensors will interface with the usb : I need to understand how the sensors will interface with the USB 6001. Also, is the Maertron module a signal conditioner for the Maertron thermocouple and what is the resulting signal?

User Account

All Pages