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Drupady [299]
3 years ago
7

Identify at least one cost and one benefit of using fiscal policy as a tool to pursue the goal of economic growth. Short respons

e please
Business
2 answers:
sertanlavr [38]3 years ago
7 0

Answer: The cost is the increase in personal income tax rate, The benefit is the control of level of demand in the economy

Explanation:

Fiscal policy is the economic policy which has to do with the raising of revenue through taxation and other means and deciding on the level and pattern of expenditure. The fiscal policy is the responsibility of the executive branch of government handled by the ministry of finance. The fiscal policy can either be a expansionary fiscal policy or contractionary fiscal policy. It is expansionary when the expenditure is channelled towards the provision of capital projects aimed at increasing the level of liquidity in the economy. It can be a contractionary fiscal policy when the personal income tax rate is increased aimed at reducing the ability of people to buy more goods and services in the economy. Therefore, we can conclude the use of fiscal policy as a tool to pursue the goal of economic growth is to ensure that through the level and pattern of budgetary provisions and the means of financing the government can control the level of demand in the economy

scoray [572]3 years ago
4 0

Answer: the cost is the increase in personal income tax rate, The benefit is the control of level of demand in the economy

Explanation:

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Has the taxpayer in each of the following situations received taxable income? If so, when should the income be recognized? Expla
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Answer:

a. Both Charlotte and Joe have received taxable income with a difference in timing. Charlotte will recognize the income in December while Joe will recognize it in January

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c. Dayo has received taxable income with a difference in timing. It will be recognized during the year

d. John has received taxable income for the year.

Explanation:

Lets look at each option and understand how taxable income is determined and how the timing will be determined as well.

a. Through the deal that Charlotte made with Joe, each will receive some form of remuneration that will be considered as income. For Joe, the income is in the form of a will which would generally cost him $3000. For Charlotte, it the income is in the form of a gazebo with the same value of $3000. The income will be recognized on the basis of when it is received by each taxpayer. So far Charlotte, the gazebo was received in December, therefore, the income will be recorded in this year only. Joe on the other hand, received his income in January, therefore, he will record the income next year.

b. In December 2015, the value of the stock increases by $600. However, this capital gain is not recognized as income since unrecognized income such as this is not classified as taxable income for the year. Since Ed continues to possess ownership of the stock in December, no income will be recognized in December. Now, Ed sells the stock in March of 2016 and recorded a gain of $500. The capital that he recovered will not be taxed under the law. The gain that he realized on sale of $500 will count towards taxable income for the year 2016.

c. Dayo will not include the bonus as taxable income for the year. For income to be recorded as taxable income, the associated <em>value</em> needs to be received by the taxpayer. As far as Dayo is concerned, she had not received the value of the bonus in December. The check was lost by the mail room which was an act completely beyond Dayo's control. Had Dayo misplaced the check herself she would have had to recognize the income in December. In this case, however, the taxable income will be recognized in January next year.

d. Two things will happen here. First, John will have to record income received from his drug operations as taxable. Even though the nature of the business is illegal, it is included under the umbrella of income. The taxable income from the drug operations would be to the tune of $60,000 which is the profit. Now as far as unemployment benefits are concerned, they are considered as a substitute for income that a taxpayer may earn from other sources. They are tax deductible up to a certain amount but some of it will be considered taxable. Therefore, both incomes will be recorded as taxable income in the current year.

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3 years ago
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3 years ago
Is an integral part of business continuity planning, but bcp is much broader?
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3 years ago
Stone Foods produces the majority of its cheese products in its U.S. based dairy division at a total outlay cost of $6.00 per un
lubasha [3.4K]

Answer:

Stone Foods produces the majority of its cheese products in its U.S. based dairy division at a total outlay cost of $6.00 per unit. A large portion of the finished product is sold to Division B where it is packaged and sold overseas under a different label. The tax rate in Division B's country is higher than the U.S. tax rate. Assume the company desires to minimize the overall tax impact of the transfer (i) what type of relative pre-tax income should each division desire to achieve as a result of the transfer and (ii) what type of transfer price would accomplish your answer to (i).  

Dairy Division Income Division B Income Transfer Price .

Option  "D"  is the correct answer -  High Low High.

Explanation:

Since in Division B, the tax rate is higher than the tax rate in US-based dairy division. Therefore to minimize the impact of the overall tax, transfer price from dairy division should be high to Division B so that the dairy division income would be higher. and the income of Division B would be lower.

Hence option  "D" is the correct answer.

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