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Econ 01

In: Other Topics

Submitted By lsoriano16
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Personally I do believe that government intervention is necessary for the economy to stay afloat and be able to function. But there is much disagreement with these. Truly though, I do not think that is the government that we have a specific problem with, the government is there to set laws, intervene and at times bail out the economy. The intervention of government is good and necessary. What I think we all have a problem with is the administration that is there at a certain point in time, their beliefs and ideals affect the economy. And I personally believe that this is when people start to disagree with “government intervention”, because an administration might or might not be doing whatever they think would be best. But the government was set up to benefit us and to set the rules and regulations so that the economy and the people would be able to function on a day to day basis and with progression.

1. a. 5% , 5.71%, 6.67% b. The tax rate is progressive; it increases as the income increases. 2. The main role of the government is to intervene in case of market failure, to establish and enforce the rules of the game, to promote competition and rule out unfair business practices, they rule out monopolies like different companies merging together. The government also provides public and private goods. The government also deals with externalities so that we are not affected by different markets; they regulate money, and also use fiscal policy to use that money to influence the economy in a positive way. 3. The positives to forming a corporation are that it is its own legal entity whose liability is limited to the value of their stock ownership. The disadvantage is that profits are taxed twice. 4. Major sources of federal government revenue are taxes (individual, income and property), user charges, borrowing and to monopolize certain…...

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