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
Q. What is Inflation? Inflation between two points in time is defined as percentage increase of price index between these two points in time.  Comments: Price inde

Q. Show the AD curve over time? With inflation, AD curve will no longer be stable over time. In its place, it will glide upwards or downwards at a rate determined by growth rat

Explain the facts or economics rate Boom: The period leading up to the peak of the cycle when an overheating economy is experiencing high GDP growth and inflationary pressures

Suppose the annual demand function for the Honda Accord is Qd = 430 - 10 PA + 10 PC - 10 PG where PA and PC are the prices of the Accord and the Toyota Camry respectively (in thous

The different between williams managerial discretion model and baumol''s sales maximization model

In reference to the above question, assume you know the combination of inputs that minimizes cost. What would happen to this input combination if the price of labor increased? What

Relationship between the interest rate and the bond price Note that the higher the issue price, the lower the interest rate. Similarly when the price of a government bond incr

Some equipment that costs $1000.00 has a 5-year depreciable life and an estimated $50 salvage value at the end of time. Determine whether to use straight-line or SOYD depreciation.

Suppose P(X1)=.75 and P(Y2/X1)=.40. What is the joint probability of X1 and Y2?

Since their inception, VAR models have been at the centre of many controversies associated with econometric modelling. The recurring criticism throughout history is due to the mode