Describe the Fiscal Policy Remedies That a Keynesian Economist Might

question 104

Essay

Describe the fiscal policy remedies that a Keynesian economist might prescribe to close a recessionary gap.How might the issue of crowding out impact the effectiveness of these policies?

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Definitions:

CCA Tax Shield

A deduction that Canadian businesses can claim for the depreciation of tangible property, reducing taxable income.

After-Tax Annual Lease Payment

The amount of lease payments due each year after accounting for the tax effects.

After-Tax Discount Rate

The discount rate after adjusting for taxes, used to evaluate investments and their future cash flows after tax implications.

After-Tax Lease Payment

After-tax lease payment refers to the lease expense remaining after deducting taxation benefits associated with the lease, illustrating the net cost of leasing to the lessee.