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Which of the following is not an example of a policy to encourage competition? a) Tax...

Which of the following is not an example of a policy to encourage competition?

a) Tax cuts on capital gain
b) Anti-collusion regulations
c) Privatisation
d) Anti-monopoly regulations

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Answer #1

Answer- Correct option is 'a'

Tax cuts on capital gain is not an example of a policy to encourage competition. Competition may be increased by investment grants and subsidies, and by tax incentives to encourage new product development. Keeping interest rates low is also a strategy that would encourage investment. Anti-collusion regulations , Privatisation , Anti-monopoly regulations all encourage competition in the market but tax cuts on capital gain, it is just as a deduct capital losses on investment property only, it doesn't encourage competition.

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