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Macro3 - Essay Example

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To create a situation in which the quantity of the good consumed is equal to the social marginal benefit rather than private marginal benefit, a subsidy should be provide to individuals. This would reduce private marginal costs to provide a more optimal allocation of resources…
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Download file to see previous pages... The consumption of education is an example of a consumption of a good that provides a social benefit that exceeds the private benefit that the student receives. Society benefits from having a skilled labour force which lowers unemployment rates and increases domestic productivity. This benefit exceeds the private benefit a single individual receives from consuming education. As such, those that choose to not consume education may decide not to do so because they will enjoy the benefits of a skilled labour force.
Government expenditures on goods and services are primarily done because the market system would not efficiently allocate resources to produce these goods or services. This could be because consumption of the good or service provides considerable social benefit which the market cannot quantify, or the good or service is non-excludible, meaning that once provided, no one can be excluded from consuming it. Thus inorder to assure optimum provision and consumption of the good, government would
The corporation is treated as a separate entity for tax and legal purposes. As such there a number of benefits associated with incorporating a business. In Limited Liability companies, owners of the corporation are not liable for the corporation’s debts. In most countries, tax rates facing corporations are lower than those facing private individuals and there and corporations are able to qualify for more tax deductions than private individuals. A corporation can continue to exist beyond its current owners.
However, forming a corporation is not a costless task and involves a number of legal requirements. In addition, most countries regulate corporations, forcing them to comply with a number of behavioural practices meant to protect employees, shareholders and consumers. Conforming to regulation is also ...Download file to see next pagesRead More
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The islm model-finance
The first version of the IS-LM model was developed by John Hicks in 1937 and introduced in his article “Mr. Keynes and the Classics: A Suggested Interpretation” as an
7 Pages(1750 words)Essay
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