Taxes are used for which of the following?

Evaluate the economic consequences of increasing progressive taxes in order to redistribute income (6)

Troyanec [42]

Answer:

Increasing progressive taxes in order to redistribute income may be seen as a fair and noble thing, but such measure may have several unintended consequences.

Explanation:

One consequence is that if taxes are raised too high on the highest earners, these people may simply leave the country for another one where taxes are lower. Wealthy people have the means to do so in the modern economy.

Another consequence would occurr if the taxes are raised too high on corporations. Corporations may either leave the country as well, or pass through the higher costs to the consumers.

All in all, progressive taxation is seen as a fair system by many economists, but it should be implemented with care, and by making cost/benefit analysis first.

4 0

3 years ago

The reserve requirement is 10%. Suppose that the Fed $ worth of U.S. government securities a bond dealer, electronically the

victus00 [196]

Answer:

D. The money supply decreases by $150,000.

Explanation:

Note: This question is not complete as some figures are omitted. The full question is therefore presented first before answering the question as follows:

The reserve requirement is 10%.

Suppose that the Fed sells $150,000 worth of U.S. government securities from a bond dealer, electronically debiting the dealer's deposit account at Reliable Bank.

Which of the following correctly describes the immediate effect of this transaction on the money supply?

A. The money supply decreases by $1,500,000

B. The money supply decreases by $135,000.

C. There is no change in the money supply.

D. The money supply decreases by $150,000.

E. None of the above.

The explanation to the answer is now provided as follows:

This is an example of Open market operations (OMO).

Open market operations (OMO) is a monetary policy strategy in which the central bank such as the Federal Reserve sells or purchases government securities in order to implement a particular monetary policy.

When the central bank sells government securities on the open market, it aims to reduce the money supply by the worth of the securities. This is called a contractionary monetary policy.

On the other hand, when the central bank purchases government securities on the open market, it aims to increase the money supply by the worh of the government securities. This is called an expansionary monetary policy.

From the question, the sale of $150,000 worth of U.S. government securities from a bond dealer is a contractionary monetary policy and it will reduce the money supply by exactly $150,000.

Therefore, the correct option is D. The money supply decreases by $150,000.

8 0

3 years ago

Although skyscrapers are mostly composed of steel and glass, carpenters are often employed to help with construction. How might

NeX [460]

To create the roof trusses

8 0

3 years ago

*Grouper, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for fires and gas le

umka2103 [35]

Answer:

1) Using incremental analysis, accept this offer because it shall result in incremental Net Income of $13,000.

2) The offer should not be accepted because it shall result in incremental Net Loss of $17,000.

Explanation:

Assume that $405,000 of the fixed overhead cots can be avoided

Make Buy Net Income Income

Increase Increase

(Decrease) (Decrease)

Direct materials $980,000 $0 $980,000 $0

Direct labor $764,400 $0 $764,400 $0

Variable overhead $137,200 $0 $137,200 $0

Fixed overhead $600,000 $195,000 $405,000 $405,000

Purchase price $0 $2,273,600 ($2,273,600) ($392,000)

Total annual cost $2,481,600 $2,468,600 $13,000 $13,000

Using incremental analysis, accept this offer because it shall result in incremental Net Income of $13,000.

Make Buy Net Income Income

Increase Increase

(Decrease) (Decrease)

Direct materials $980,000 $0 $980,000 $0

Direct labor $764,400 $0 $764,400 $0

Variable overhead $137,200 $0 $137,200 $0

Fixed overhead $600,000 $600,000 $0 $0

Opportunity cost $375,000 $0 $375,000 $375,000

Purchase price $0 $2,273,600 ($2,273,600) ($392,000)

Total annual cost $2,856,600 $2,873,600 ($17,000) ($17,000)

The offer should not be accepted because it shall result in incremental Net Loss of $17,000.

3 0

3 years ago

If goods are to be paid for in advance, which document may the seller issue?

Free_Kalibri [48]

Answer:

Receipt voucher

Explanation:

Hope it helps you......

4 0

3 years ago