Homework Answers
a) When tax rate rises more than T* where tax revenue is maximized, Tax revenue will fall. When tax rate falls below T*, tax revenue will fall.
b) If tax rate grows more than T*, tax revenue will start declining. Producers will not invest, people will not run for higher packages because they will be taxed more. It will result in decline in economic activity and economy will enter into a recession.
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Curve. Explain what will happen to Canada's position on the Laffer Curve for both the cases...
Problem 5 "Laffer Curve" (20 points) 1. (6 pts) What is Laffer Curve? 2. (8 pts)...
Problem 5 "Laffer Curve" (20 points) 1. (6 pts) What is Laffer Curve? 2. (8 pts) As Canada recovers from the economic challenges brought on by the COVID pandemic, the federal government will make choices that will cause tax rates to rise or fall. This will cause a change in Canada's position on the Laffer Curve. Explain what will happen to Canada's position on the Laffer Curve for both the cases where the tax rates rise and when they fall....
1. (6 pts) What is Laffer Curve? 2. (8 pts) As Canada recovers from the economic...
1. (6 pts) What is Laffer Curve? 2. (8 pts) As Canada recovers from the economic challenges brought on by the COVID pandemic, the federal government will make choices that will cause tax rates to rise or fall. This will cause a change in Canada's position on the Laffer Curve. Explain what will happen to Canada's position on the Laffer Curve for both the cases where the tax rates rise and when they fall. 3. (6 pts) What will happen...
Problem 5 “Laffer Curve” (20 points) (6 pts) What is Laffer Curve? (8 pts) As Canada...
Problem 5 “Laffer Curve” (20 points) (6 pts) What is Laffer Curve? (8 pts) As Canada recovers from the economic challenges brought on by the COVID pandemic, the federal government will make choices that will cause tax rates to rise or fall. This will cause a change in Canada’s position on the Laffer Curve. Explain what will happen to Canada’s position on the Laffer Curve for both the cases where the tax rates rise and when they fall. (6 pts)...
“Laffer Curve” a. What is Laffer Curve? b.As Canada recovers from the economic challenges brought on...
“Laffer Curve” a. What is Laffer Curve? b.As Canada recovers from the economic challenges brought on by the COVID pandemic, the federal government will make choices that will cause tax rates to rise or fall. This will cause a change in Canada’s position on the Laffer Curve. c. Explain what will happen to Canada’s position on the Laffer Curve for both the cases where the tax rates rise and when they fall. d. What will happen if Canada’s Tax Rate...
Laffer Curve What will happen if Canada’s Tax Rate grows higher than T*?
Laffer Curve What will happen if Canada’s Tax Rate grows higher than T*?
please try to do it ASAP and it's 15 marks so please explain it As Canada...
please try to do it ASAP and it's 15 marks so please explain it As Canada recovers from the economic challenges brought on by the COVID pandemic, the federal government will make choices that will cause tax rates to rise or fall. This will cause a change in Canada’s position on the Laffer Curve. Explain what will happen to Canada’s position on the Laffer Curve for both the cases where the tax rates rise and when they fall.
3. This question concerns government and the Laffer Curve. a. Draw the Laffer Curve (with the...
3. This question concerns government and the Laffer Curve. a. Draw the Laffer Curve (with the correct axes) and explain what it means to “be on the wrong side of the Laffer Curve.” (2 points) b. When the following statement is made: “we want to broaden the base and lower the rates,” explain the impact of this on the taxes paid of high income people. (2 points) c. In order for tax cuts to increase revenue, explain what has to...
The Laffer Curve graphs the amount of government revenue as a function of the tax rate....
The Laffer Curve graphs the amount of government revenue as a function of the tax rate. It is hypothesized to be inverse U-shaped -- first increasing, reaching a maximum, and then decreasing. The maximum of the Laffer curve represents the largest size of government that can be sustained, because beyond it, higher tax rates actually reduce government revenue. Consider a consumer with preferences U = ln(x) + ln(1 − ℓ), where x is consumption and ℓ is labor supply. Let...
What will happen if Canada’s Tax Rate grows higher than T*?
What will happen if Canada’s Tax Rate grows higher than T*?
what will happen to the unemployment rate and the price level in year 2?
What is the correct answer In the dynamic AS/AD model, the economy is in long run equilibrium in year 1, but in year 2, LRAS shifts to the right more than AD, which shifts to the right more than SRAS. Compared to year 1, what will happen to the unemployment rate and the price level in year 2? They both will fall. The unemployment rate will rise and the price level will fall. They both will rise. The unemployment rate will fall and the price...
Problem 5 "Laffer Curve" (20 points) 1. (6 pts) What is Laffer Curve? 2. (8 pts) As Canada recovers from the economic challenges brought on by the COVID pandemic, the federal government will make choices that will cause tax rates to rise or fall. This will cause a change in Canada's position on the Laffer Curve. Explain what will happen to Canada's position on the Laffer Curve for both the cases where the tax rates rise and when they fall....
1. (6 pts) What is Laffer Curve? 2. (8 pts) As Canada recovers from the economic challenges brought on by the COVID pandemic, the federal government will make choices that will cause tax rates to rise or fall. This will cause a change in Canada's position on the Laffer Curve. Explain what will happen to Canada's position on the Laffer Curve for both the cases where the tax rates rise and when they fall. 3. (6 pts) What will happen...
What is the correct answer In the dynamic AS/AD model, the economy is in long run equilibrium in year 1, but in year 2, LRAS shifts to the right more than AD, which shifts to the right more than SRAS. Compared to year 1, what will happen to the unemployment rate and the price level in year 2? They both will fall. The unemployment rate will rise and the price level will fall. They both will rise. The unemployment rate will fall and the price...
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