Question Description
For each of the following scenarios, discuss the implications for individual and social welfare as well as for the aggregate economy. Then address the question of what will be the possible and/or likely effects on the rate of economic growth. Explain your conclusion with reference to the economic concepts and measures covered in the module.
- The National Diet of Japan passes an investment tax credit, which reduces a firm’s tax if it installs new machinery and equipment.
- The Prime Minister of Thailand passes a law that allows taxpayers to reduce their income taxes by the amount of state sales taxes they pay.
- The National People’s Congress provides more funds for low-interest loans to college students.
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