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Why the relationship between price elasticity and the incidence of taxation is important for local government to understand? Specifically, in terms of policy implementation which will involve taxation.

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Yusra Anees
Yusra AneesLv10
28 Sep 2019

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Related questions

1.Explain why the relationship between price elasticity and the incidence of taxation is important for a local authority/government to understand, specifically, in terms of policy implementation which will involve taxation.

2. What is the difference between a basic "cost-benefit analysis" and a "cost-effectiveness analysis". Explain a potential scenario where a cost-effectiveness analysis should be used instead of a cost benefit analysis.

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Briefly define the term or phrase and explain why it is important to (Canadian) Tax Policy. {Short Answer}

1) Incidence of a Tax

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3) integration of the Personal Income Tax and Corporate Income Tax for dividend income

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Note: Google without thinking will not be rewarded. Please ANSWER all the question

Calculate the government-taxation multiplier for each marginal propensity to consume. Instructions: Round your answers to two decimal places.

a. The marginal propensity to consume (MPC) = 0.2, and the government spending multiplier is 1.25. The taxation multiplier is ?.

b. The marginal propensity to consume (MPC) = 0.5, and the government spending multiplier is 2.00. The taxation multiplier is ?.

c. The marginal propensity to consume (MPC) = 0.8, and the government spending multiplier is 5.00. The taxation multiplier is ?.

 

d. What do your results imply about the relative strength of changes in government spending versus changes in taxation for fiscal policy, all else equal?

i.   Changes in government spending will have an indeterminate effect on GDP and income compared to changes in taxes.

ii.  Changes in government spending will have a bigger effect on GDP and income than will changes in taxes.

iii. Changes in government spending will have an equal effect on GDP and income compared to changes in taxes.

iv. Changes in government spending will have a smaller effect on GDP and income than will changes in taxes.

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