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Question: Investment and the corporate income tax: Suppose the user cost of capital in an economy with no corporate income tax is 10 percent.
(a) What is the user cost if the corporate tax rate rises to 20 percent? 30 percent?
(b) Suppose an economy's steady-state investment rate I / Y is 30 percent when the corporate tax rate is zero. What happens to this investment rate if the corporate tax rate rises to 20 percent? 30 percent?
(c) Are differences in corporate tax rates across countries a plausible explanation for the large variation in investment rates that we see in the data?
Harvard historian James Landis has argued that most of the long-term differences in productivity growth among countries can be explained by their distance.
In a two-period lived economy, one consumer wishes to buy a TV set in period 1. Calculate the prices the monopoly charges for TV sets in periods 1 and 2.
What are the economic returns - you must talk in terms of both social and economic.
About two-thirds of funding for substance abuse treatment comes from taxpayers. Are there external benefits of substance abuse treatment that warrant this level of public funding?
Discuss each term in the demand constraint. How is the right hand - side element of these constraints determined? How many constraints are there?
an excise tax of 1.00 per gallon of gasoline placed on the suppliers of gasoline in a market with downward sloping
In 2005, The economist reported that France's real exchange rate had increased relative to Germany's real exchange rate during the preceding two years. How can this be true if both France and Germany used the euro as their currency.
Suppose the federal government balanced the budget and no longer ran a deficit. Speculate how this would affect interest on the federal debt. Justify your response.
mary expects to retire in five years. she is considering one of three possible career changes. each has different costs
Why is the debate between the international dependence and the neoclassical counterrevolution schools referred to as "finger pointing?"
In no less than 150 words What is the difference between accounting and economic profit
Explore the assumptions underlying price elasticity of demand and apply them to the above set of circumstances. do you believe the computation of elasticity is an indicator price sensitivity? explain.
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