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Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406

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Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406
Textbook Problem

Suppose anyone who buys a house in a certain year gets to pay $1,000 less in income taxes (assuming that the tax owed is greater than $1,000). Would the tax credit affect house prices? Explain your answer.

To determine

The impact of subsidy on the demand curve.

Explanation

Yes. The tax credit has a positive impact on the house prices. The reduction in the income tax on the basis of buying a house makes it attractive to the individuals...

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