Question

1. States (and provinces) that have control over taxation sometimes reduce taxes in an attempt to spur economic growth. Suppose that you are hired by a state to estimate the effect of corporate tax rates on, say, the growth in per capita gross state product (GSP). What kind of data would you need to collect to undertake a statistical analysis? Is it feasible to do a controlled experiment? What would be required?

Answer 1

Answer: PageNo: 1 a) Dalia - Set :- GDP growth data corporate tax rates → Increased consumption domestic and foreign capital Increased investment wage Rate & ezzective can we use of stock a marginal dummy in the tax sate variable economy. for any kind b) They arise changes tax the changes tax for than some reasons that condition of the the economy. The experiment environment variable will be lost impact and the of these study is not enough.

Page No:2 noticed The signizicant by someone exogenous bax macroeconomic expects is and soots of plausibly changes. There might be reverse causation as well - The corporate taxes economic growth. is impacting by the – The effect is also lost The only one way for exogenous shocks etc., dummy variables. majorly to traceable introduce is