Exclusion of municipal bond interest from income taxation
Course:- Business Economics
Reference No.:- EM13795760

Assignment Help >> Business Economics

a. Construct a numerical example to show that the exclusion of municipal bond interest from income taxation is equivalent to a government subsidy of state and local capital spending.

b. Explain why it costs the government (taxpayers) more to subsidize this activity through the exclusion of municipal bond interest than it would be to simply give the subsidy directly.

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Business Economics) Materials
Government purchases rise to 1440. How does this increase change the equation describing desired national saving? Show the change graphically. Illustrate what happens to the
Which of the following cannot explain the change in female labor force participation rates over the past 75 years? Unemployment compensation programs provide a lower income th
From observations over many years, the company has concluded the fill amounts in their 2 litre bottles is normally distributed with a mean of 2.01 litres and a standard devi
In 1191, Three-year old Douglas Moore was playing with one of BIC’s lighters. While playing with the lighter, he started a fire that severely injured his 17-month-old brother.
Explain how does the income approach to measuring GDP differ from the expenditure approach. Explain the meaning of value added and its importance in the income approach.
If the minimum wage is set at $100, how many will be unemployed? If the minimum wage is equal to $125, what is the quantity of labor supplied, the quantity of labor demanded,
Suppose that aggregate planned expenditure increases by $0.75 trillion for each $1 trillion increase in real GDP. If investment increases by $1 trillion, calculate the change
Suppose a firm produces two goods, pizzas and subs. Let Qp represent the number of pizzas produced and Qs represent the number of subs produced. The firm's cost function is gi