Question

what changes can a government make to tax policies to stimulate investment in more projects?

what changes can a government make to tax policies to stimulate investment in more projects?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Government can stimulate private investment in more projects by giving required stimulus in the form of tax breaks reduction in corporate taxation, providing investment tax credit etc. It has been argued that such a reduction will increase the profits of the employers and they surpass some of its benefits to their employees in the form or increased wages and perks. Also, with investment tax credit, firms are more likely to take up projects with longer gestation period and even a smaller relative return. Reductions in the user cost of capital in relation to labour, according to the theory of labor economics, can play a significant role in encouraging corporate investment.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Evaluate the policies can the government of a free market economy implement to stimulate economic growth.
Evaluate the policies can the government of a free market economy implement to stimulate economic growth.
Can monetary and fiscal policies complement each other? Suppose economic policymakers are attempting to stimulate a...
Can monetary and fiscal policies complement each other? Suppose economic policymakers are attempting to stimulate a recessionary economy by raising government spending and lowering taxes. What sort of monetary policy is likely to be appropriate? (Address the crowding out issue.)
Questions about government policies a) what are the definitions of two government policies that alter the...
Questions about government policies a) what are the definitions of two government policies that alter the price market outcome in chapter 6. b) Using the supply-demand diagram model to do analysis about price control. c) Explain tax on buyers and tax on sellers. What is the difference between two cases and what is wedge driven by tax, please using the graph to see how the tax affect the market outcome.
1. Suppose the government plans to stimulate the economy in a specific year. One policy would...
1. Suppose the government plans to stimulate the economy in a specific year. One policy would cut taxes and government expenditures by the same amount: $50 billion. Another policy would give businesses a temporary investment tax credit of 15% on each productive investment project. Which policy would be more successful in stimulating the economy? Explain. 2. How does inventory investment (planned and unplanned) change during recessions and booms? Explain.
Protectionism refers to government policies that: A. give foreign producers tax credits in an effort to...
Protectionism refers to government policies that: A. give foreign producers tax credits in an effort to increase their exports. B. stimulate trade between countries and increase domestic producers profit. C. restrict imports of foreign products. D. restrict the output of domestic producers to keep their prices high. Which could be sources of funding for a government that wants to increase government expenditures? A. both taxes and borrowing B. neither taxes nor borrowing C. taxes only D. borrowing only When fiscal...
1. Using a supply and demand diagram, show the effect of the following policies on the...
1. Using a supply and demand diagram, show the effect of the following policies on the real interest rate and the amount of investment in the economy. show work. a) the introduction of an investment tax credit b) Government spending falls c)Taxes increase d) New policies make it more attractive for households to save
Briefly explain how import tariffs can be part of a set of government policies to increase...
Briefly explain how import tariffs can be part of a set of government policies to increase national well-being for small developing countries where government revenue is difficult to obtain by other means such as an income or sales tax.
Compare and contrast the use of government spending changes versus tax changes as a means of...
Compare and contrast the use of government spending changes versus tax changes as a means of influencing the course of the economy. Is one or the other preferable in specific situations? Imagine for a moment that you have two roommates, who each have opposing viewpoints on nearly everything, including politics and economics. Taylor is adamant that the best way to manage the economy is through tax changes, while Morgan insists that it’s better to adjust the economy through government spending....
It may be argued that government programs and tax and inflation policies have benefited home owners...
It may be argued that government programs and tax and inflation policies have benefited home owners in canada. Explain how, if at all , each of these economic components affects house prices Provide at least two examples of tax policies/governement programs with suggestions for how they affect house prices
Changes in taxes and spending by the executive and legislative branches of a country's government that...
Changes in taxes and spending by the executive and legislative branches of a country's government that can be used to either stimulate or restrain the economy are called: Select one: a. monetary policy. b. fiscal policy. c. foreign policy. d. exchange rate policy.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT