Principles of Microeconomics
7th Edition
ISBN: 9781305156050
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 12, Problem 6CQQ
To determine
The impact of the given scenario.
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Principles of Microeconomics
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- Choose the Correct Answer. 1. This is a tax levied on gifts and is imposed on the gratuitous transfer of property between two or more persons who are living at the time of the transfer. A. Estate tax B. Capital gains tax C. Donor Tax D. Income Tax 2. It shows the peak of a business cycle. A. Recession B. Recovery C. Prosperity D. Depression 3. It shows that both production and employment fall. A. Recession B. Recovery C. Prosperity D. Depression 4. It pertains to the situation whereby both production and employment are at their lowest levels. A. Recession C. Prosperity Recovery D. Depression 5. It is a point in business cycle whereby both production and employment are rising towards full employment. A. Recession B. Recovery C. Prosperity D. Depressionarrow_forwardReduction and elimination of corporate income taxes (CIT) and the economic result: Examples from North Carolina and Ohio The corporate income tax (CIT) is levied by federal and state governments on business profits, which are revenues (what a business makes in sales) minus costs (the cost of doing business). State-level corporate income tax rates vary across the country. Six states (Nevada, Ohio, South Dakota, Texas, Washington, and Wyoming) levy no corporate income tax, while the remaining states and the District of Columbia do tax corporate profits. Note: Many companies are not subject to the CIT because they are taxed as pass-through businesses, with income reportable under the individual income tax. Lowering the CIT: North Carolina North Carolina’s tax environment is one of the nation’s most competitive. As of 2021, the state boasted the nation’s third-lowest effective tax rates for newly established firms and fifth-lowest rates for mature firms. Just eight years ago, North…arrow_forwardA new elected government want to reform its tax system. As an economist you are hired to advise the government how to design a better tax system. Give your recommendation on factors that government need to consider if they want to implement the better tax system. Add specific example or case for each factor you recommend to governmentarrow_forward
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