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
Assume a 5 year equal payment amortization schedule with an annual interest rate of 12% and annual payments. If the beginning is 8,000 then the first interest payment will be how l

The Research and Development Division of your company has just developed a new gaming system called the Zed Box.  The R&D Division spent $800,000 developing this product and the Ma

Consider the economic data for Country A: Unemployment level of 15% Natural Rate of Unemployment is 6%. Required Reserves is 25% C = 50 + 0.75Y; I = 600; G = 250 (note: T = 200 for


a small country produces 5000 units of output and has a money suplly of $2000. if citizens want to hold 10% of their income in money ie k=0.1 what are v, $gnp, p and real money sup

Explain the difference among saving and investment as explained by macroeconomists. Which of the following situations represent investment or saving? Explain: a) You u

Which of the following would indicate the beginnings of an expansion of the economy? a. Fewer new firms are started. b. Stock market prices decline c. Consumer confidence improves

Draw the PPC model of peace time goods and war time goods and describe its characteristics. Label point A as being more toward peace time goods than war time goods and show graphic

Major fiscal objective of Chancellor George Osborne The major fiscal objective of Chancellor George Osborne when coming to office in May 2010 was to remove the UK's structural

Importance of macroeconomics models Using the models we can, for example, analyze what happens when the government increases consumption, when the central bank increases the tar