Tax credit, Macroeconomics

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?

 

Posted Date: 2/21/2013 8:17:17 AM | Location : United States







Related Discussions:- Tax credit, Assignment Help, Ask Question on Tax credit, Get Answer, Expert's Help, Tax credit Discussions

Write discussion on Tax credit
Your posts are moderated
Related Questions
What is the emerging market economy According to Investopedia, Antoine W. Van Agtmael of International Finance Corporation of the World Bank first mentioned the term emerging m

Kermit is considering purchasing a new computer system. The purchase price is $106,430. Kermit will borrow one-fourth of the purchase price from a bank at 10 percent per year compo

Assume that an economy's GDP Y=5000. Also assume that the government runs a deficit where tax revenue T=1000 and government expendituresG= 1500. The consumption function is represe


n 2013, approximately 58 percent of the adult population (245 million) was employed, the lowest employment rate in 20 years. If the employment rate increased to the prerecession l

Demand: Demand is quantity of a good buyer who wishes to purchase at each conceivable price. The law of demand explains us that if the price of certain commodity increases,

Instructions For the following 10 questions, consider an economy which is initially in equilibrium without a tax, with P* of $90 and Q* of 10. Later, a tax is put on the market

Government and Price-Determination can be understood as follows: The government might intervene in the market and mandate the maximum price (price ceiling) or the minimum price

A radiology firm charges $2,000 per exam. Uninsured patients are expected to pay list price. How much do they pay?