Should the Government use Fiscal or Monetary Policy to Eliminate Canada’s Current Contractionary Gap? Introduction An economic recession is a period of slow economic activity; this contractionary phase is characterized by high unemployment and low levels of GDP. On the other hand, government bodies desire economic growth and low unemployment levels in order to attain a stable economy. These goals may be reached through the use of either fiscal policy or monetary policy. This paper will focus on and discuss which policy is more effective in eliminating the current recessionary gap of Canada.
(p. 204) The pay-mix component in which benefits is likely to be largest is ______________. A. work-life balance b. security or commitment c. performance driven d. market watch 10. (p. 207) Which of the following is not a consequence of level of competitiveness of total compensation? a. increase probability of union-free status B. increase organization profitability c. reduce voluntary turnover
The author’s main theory is that the economy is headed for a recession. The text book defines fiscal policy as: Changes in government spending and tax collections designed to achieve a full-employment and non inflationary domestic output. Government spending is understated and slightly overlooked in the article. The author only hints of the fact that federal government spending on defense is down. “Another negative factor was a 6.6 percent drop, on an annualized basis, in federal defense spending.” She supports that the decrease in GDP is directly related to the decrease in government spending g which proves how fiscal policy can affect overall economic growth.
A flat tax employs territorial taxation, which is when the government only taxes income that is generated within national borders (Meehan). In the global economy, taxes remain a critical component of business; countries with low-taxes benefit from jobs and capital (Meehan). A good tax policy is important to generate revenue for business and also because the penalty for a poorly received tax system on a global scale may be substantial and long-term (Meehan). The flat tax eliminates
This ensures us to get the reinvestment return from the cash flow on the WACC without worrying about the scale problem. I find that developing the new technologies in the house has higher MIRR than purchasing; the two rates are 17.40% and 15.40% respectively. 2. NPV, the sum of the present value of the cash outflows and inflows can measure the expected change in wealth from undertaking the project. The NPV for purchasing the technologies is 94.71 million and the NPV for developing the technologies is 127.24 million.
The total value of the levered firm exceeds the value of the firm without leverage due to the present value of the tax savings from debt: V^L = V^U + PV(interest tax shield) 4. when a firm’s marginal tax rate is constant, and there are no personal taxes, the present value of the interest tax shield from permanent debt equals the tax rate times the value of the debt, τcD. 5. The firm’s pretax WACC measures the required return to the firm’s investors. Its effective after-tax WACC, or simply the WACC, measure the cost to the firm after including the benefit of the interest tax shield. Page 484 has formulas!!
Macroeconomics Fundamentals Brian Aungst ECO/372 September 18, 2012 Reynaldo Vanta Macroeconomics Fundamentals Gross domestic product (GDP) is the value of goods and services that the nation produces and sells in one year. GDP is a good indicator of a nation’s growth. Real gross domestic product is the market value of goods and services produced and sold in a nation’s economy in one year. Real GDP is also nominal GDP adjusted for inflation. Nominal gross domestic product is the value of goods and services that the nation produces and sells in one year that has not been adjusted for inflation.
For example, $15 billion was given to companies to offset losses. The rich, those making $250,000 or more, should not have tax incentives because they already have enough money. The rich can afford to pay more due to having more. It is the middle class and the poor who struggle in this economy and not the rich, according to this argument. Although it is the rich who employ the middle class and the poor, the rich are also accused of holding on to their money and not spending it while those with less money would be required to spend their money due to their intense need
They needed the support of the manufacturing company to have the town survive. Our Government needs to be more involved with helping the American businesses by using trade agreements and import quotas similar to the ones that Ronald Regan imposed. Regan imposed temporary quotas on some Japanese goods, trying to give American manufactures the time to compete with the reliability and efficiency of the cars arriving from Japan. However, the plan did not work as Regan had hoped it would. The Japanese opened factories in the United States.
In face, the GDP growth did not reach 3 percent or over unit Q3 2003. One good thing about a recession is that it will cure inflation. The balancing act the Federal Reserve must pursue that is it is to slow for the economic growth enough to prevent inflation without triggering a recession. As of now it must do this without the help of the fiscal policy, which is generally trying to stimulate the economy as mush as possible through the lowering taxes, spending on social programs and ignoring current account