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

Ask an Expert

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

Write your message here..

Related Questions

Towards a national accounting system, TOWARDS A NATIONAL ACCOUNTING SYSTEM ... TOWARDS A NATIONAL ACCOUNTING SYSTEM  A real life modern economy is a very complex structure consisting of millions of units engaged in a variety of economic transactions. Ther

Characteristic of capitalism, Knowing that a neoclassical, capitalist econo... Knowing that a neoclassical, capitalist economy depends on continuous economic growth (by making its production, distribution, and consumption more efficient), what might a savvy p

Important for policymakers, Why is it important for policymakers to conside... Why is it important for policymakers to consider both the direct and indirect effects of public policies?

Keynesian economics of consumption, Effects of consumption function. Effects of consumption function.

Anova data analytical approach, This assignment lets you explore a quasi-ex... This assignment lets you explore a quasi-experimental model using ANCOVA data analytical approach. By doing this data analysis project, you will understand a new quantitative resea

What is demand for money, Q. What is Demand for money? Demand for mone... Q. What is Demand for money? Demand for money The demand for money depends negatively on R and positively on the Yin the IS-LM model As fo

What is price elasticity of demand, Explain the elasticity concept as it ap... Explain the elasticity concept as it applies to necessities and luxuries. Calculate the price elasticity of demand when P= 160 - Q= 480: and when P=240 - Q=320. Calculate and inter

Employment, critically analyse the ways at which the government of zimbzbwe... critically analyse the ways at which the government of zimbzbwe has put in place to address unequal employment opportunities between men and women

Explain money market with inflation, Q. Explain money market with inflation... Q. Explain money market with inflation? The money market with inflation  Let's begin with the money market diagram and introduce inflation. As M D relies positively on P

Macroeconomic variables, What are the trends of labour and capital as macrf... What are the trends of labour and capital as macrfoeconomics variables?