ECONOMICS
FISCAL POLICY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
cost of production which subsequently affects investment.
|
|
|
after-tax profits which subsequently affects investment.
|
|
|
interest rate which subsequently affects consumption.
|
|
|
disposable income which subsequently affects consumption.
|
Detailed explanation-1: -A 1 percentage point reduction in tax rates increases investment by 4.7 percent of installed capital, increases payouts by 0.3 percent of sales, and decreases debt by 5.3 percent of total assets.
Detailed explanation-2: -An increase in the investment tax credit, or a reduction in corporate income tax rates, will increase investment and shift the aggregate demand curve to the right. Real GDP and the price level will rise.
Detailed explanation-3: -The union budget 2023 has made no changes to the corporate tax structure in India and it seems that the focus is on stability, ease of doing business and easing the compliance framework, writes Dr Suresh Surana, Founder, RSM India.
Detailed explanation-4: -Domestic Corporate Entity with a turnover up to Rs 250 Cr is liable to pay 25% of corporate Tax. For a Financial year, if the total revenue generated by a company is above 1 crore, then a surcharge corporate tax is 5% on such a corporation. Domestic Corporation is also liable to pay Health and Educational Cess at 4%.