Question

d. Are there any 2. In China, with the imposition of a new law regulating the tax reform program of the Country enters a drastic change in its economic set-up. Basically, income received by employees increases however, taxes with respect to prices of commodities also increases tremendously. (30 points) a. Would there be a significant change in the demand and supply of the different commodities with respect to this new law? Discuss your answer. b. Having the backlash of the new law, would you agree that the government should provide a subsidy to various companies in China affected by the tax reform? Justify and provide supplements to support your answer. c. Discuss the significance of taxes and its effect to current businesses, the government and its citizens. Provide possible circumstances to support your discussion.

Answer 1

Answer:

There is a gigantic change in the interest and supply of products due to this law. Since charge is identified with the cost of the wares are expanding. The versatility of interest and supply are relying upon cost of the items. In the event that the flexibility of supply is more than versatility of interest the maker will bear the expense. If the elasticity of demand is more than elasticity of supply then the buyers/citizens will bear the cost. This new law of increasing tax on commodities will affect the both buyers and sellers. The tax is collected from both suppliers and sellers. For example, let us consider the price of onions increased by tax. People will use onions less than they usually needed because increasing of price. So, the demand will falls down in buying onions. In this way company also effects to buy or supply of their goods into the market. This will affect the people for their living costs and also suppliers who are selling onions because they also should buy from farmers. So, tax increasing on commodities wills leads to disrupt in their daily activities.

Yes, I concur that legislature ought to give the appropriation to the different organizations affected by this new law in light of the fact that the organization should exertion the compensations of workers that are expanded of this law. What's more, the organization may require this kind of advances to build up their business by purchasing and selling products into the business sectors. So they want this type of subsidy loans to buy the goods that are needed to their business. But this subsidy should be provided to the company if and only if they increase the salaries of their employees. And the company should use this subsidy only under legal conditions. The government should increase this type of schemes because the taxes are increasing and they affect the people and companies. Because of this inconvenience of law that is charge increments on products will influence the economy of government. Assessment expanding implies compensation, pay rates, costs of the wares expanded. This influences the organizations, residents, government too. Because of increment of the cost of the products that individuals use in their everyday exercises will influence the day by day schedule of the residents. They cannot buy such things due to increase of prices because some citizens are not at all wealthy. This new law will effects the current business of the various companies and get huge loss due increase the price of their goods. They cannot buy or supply the goods into the market. This law starts from government and also effects the government in a way that the government should provide subsidy loans for companies that leads to decrease of government economic wealth.