Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. economics
  3. suppose government puts a tax on investment at rat

Suppose government puts a tax on investment at rate Ï„. That is, you get only 1...

60.1K

Verified Solution

Question

Economics

Suppose government puts a tax on investment at rate τ. That is,you get only 1 − τ apple tree next period if you invest one applethis period. Derive the investment demand equation. What would bethe effect of this tax on net exports and real exchange rate in anopen economy in long run and very-long run? Explain in detail byshowing the changes in the relevant markets.

Seriously?! thats how the question is asked in the assignment! iexpect an answer for this asap!

Answer & Explanation Solved by verified expert
3.6 Ratings (362 Votes)
As the government has imposed taxation on the investment the incentive for a person to invest will gradually be less than what he normally wouldThe tax would be decentive an investor to invest as the returns would be lower than expected The    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Heyman Company bonds have 4 years left to maturity. Interest is paid annually, and the bonds...

Finance
Q

Explain with schematics the two-photon polymerization technique.What is its advantage over stereolithography.

Mechanical Engineering
Q

Consider the following all-integer linear program: Max 5x1 +8x2 s.t.   6x1 + 5x2 <= 30 9x1 + 4x2 <=...

Advance Math
Q

Look at this diagram Based on your own knowledge which choice best finishes this timeline...

Biology
Q

The superintendent wants to study the effects of phone distractions on math test scores In...

Basic Math
Q

There are 8 acts in a talent show.An acrobat, a comedian, a dancer, a magician,...

Statistics
Q

According to a report published two years ago by the National Center for Education Statistics...

Statistics
Q

2 A circle has the equation x y x 6y 9 0 a Find the...

Algebra
Q

which of the following is the most important criterion in determining an employees nonforfeitable percentage...

Accounting
Q

How does the allowance method provide a more accurate reporting result?

Accounting
Q

If the confirmed return is 48500 and the confirmed coefficient is 57%, then * the...

Accounting
Q

Exercise 25-5 The standard cost of Product B manufactured by Pharrell Company indudes 3.7 units...

Accounting