1. A local government authority decided to impose a flat tax of 5 dollars per day...

 

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1. A local government authority decided to impose a flat tax of 5 dollars per day on all retail store owners in the city. Is this tax progressive, regressive, or flat? Explain. Is this tax direct or indirect? 2. To boost economic activity and create more jobs, the government (through the central bank) increased treasury bill rates, and reduced the highest PAYE tax rate from 25 % to 20%. State and explain two factors that may limit the effectiveness of this government policy. 3. Explain why increasing money supply need not result in inflation in an economy Assuming a government wants to increase the Velocity of Money (V) in an economy. What steps/policies could be implemented to help increase V? 1. A local government authority decided to impose a flat tax of 5 dollars per day on all retail store owners in the city. Is this tax progressive, regressive, or flat? Explain. Is this tax direct or indirect? 2. To boost economic activity and create more jobs, the government (through the central bank) increased treasury bill rates, and reduced the highest PAYE tax rate from 25 % to 20%. State and explain two factors that may limit the effectiveness of this government policy. 3. Explain why increasing money supply need not result in inflation in an economy Assuming a government wants to increase the Velocity of Money (V) in an economy. What steps/policies could be implemented to help increase V?

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Answer The flat tax of 5 per day on all retail store owners in the city is a regressive tax A regressive tax takes a higher percentage of income from lowincome earners than from highincome earners In ... View the full answer