Suppose investment income is taxed at a higher rate than the interest that consumers earn on their
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Suppose investment income is taxed at a higher rate than the interest that consumers earn on their savings. Explain why the social opportunity cost of funds used for government projects will depend on whether investment or consumption will be displaced as a result of the project.
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The social opportunity cost of funds refers to the value of the next best alternative that is forgone when resources such as funds are allocated to a particular government project In the context of ta...View the full answer
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Related Book For 
Public Finance A Contemporary Application Of Theory To Policy
ISBN: 9780538754460
10th Edition
Authors: David N Hyman
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