Tax credit, Macroeconomics

Assignment Help:

Suppose that an investment tax credit is stated to be temporary in nature, and the credit will be 10% on newly acquired capital (investment) equipment and will last just one year only.

a.  What would you predict to be the effect of this tax credit in the long-run (say, 5 or 6 years)?

b.  What would you predict to be the effect of this tax credit in the current year and the following year?

c.  How would your answers to parts (a) and (b) differ if the tax credit were permanent?

 


Related Discussions:- Tax credit

Production economic .., One constraint in our economy is time. As a society...

One constraint in our economy is time. As a society, we make choices about the allocation of time between work and other pursuits. In the US, most workers are eligible for overtime

Name two strategies is most likely to lead to development, Explain which of...

Explain which of the two strategies is most likely to lead to development. Empirically, it seems rather evident that export-orientation has been more successful than import-sub

Financial payments flow between firms and government, Explain whether, the...

Explain whether, the following statements are TRUE, FALSE or UNCERTAIN. Briefly justify your answer. (i) The circular flow shows how real resources and financial payments flow

Price results in the efficient quantity, The Price ceiling is the law that ...

The Price ceiling is the law that sets a maximum price below the equilibrium market price, but a price floor is the law that sets a maximum price above the market equilibrium price

Frequency distribution channel, The original data values cannot be determin...

The original data values cannot be determined once they are grouped into a frequency distribution channel?

Labor is continuously compounded, Function given: Qt=A0Lt^6Kt^4, Lt=L0e^.03...

Function given: Qt=A0Lt^6Kt^4, Lt=L0e^.03t, Kt=K0e^.02t 1. Growth of labor is continuously compounded at 3% 2. Growth of Capital is continuously compounded at 2% Solve:

The circular flow of income in a closed economy, The circular flow of incom...

The circular flow of income in a closed economy   A closed economy exists when there is no international trade. We shall also assume that in this particular closed economy there

Illustrate diffrent types of money, Q. Illustrate diffrent types of money? ...

Q. Illustrate diffrent types of money? In most countries, one may identify two 'types of money': Bank deposits Currency and coins   The total value of all th

Fiscal, what is the supply side

what is the supply side

Write Your Message!

Captcha
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