Secure I https://sisweu.ucd.ie usis/w ep display.p paperip paper id=/8841 w.ep_d

Question

Secure I https://sisweu.ucd.ie usis/w ep display.p paperip paper id=/8841 w.ep_display.p_paper 34 cconomy with which you arc familiar and discuss the factors that affect the competitiveness of firms there in international trade. (30%) Question 4 (a) There has been an increase in Irish government income from taxation during 2016 (i) Outline the major reasons for this outcome. (ii) Describe ONE revenue opportunity and ONE expenditure opportunity for the government arising from this increased incomc. Which of thesc would you consider a priority? Explain your choice (35%) (b) Explain how an understanding by the Minister for Finance of the concept of Price Elasticity of Demand would help in setting levels of indirect taxation. Use examples to illustrate your answer (25%) (c) Explain the concept of Quantitative Easing and outline the process by which it is urpose of such a undertaken by central banks. Briefly address the issue of the p policy and the success of it to date within the Eurozone (40%) Paae 3 of 4 q. t 14-15 pdf 15-16.pdf Show all ^ ^ 14. 15docx-10773.docx 13-14docx-10//4docx 16-1 1.pdf 13-14.pdf 224 12/12/2017

Explanation / Answer

4

a) * Due to increased income in Ireland.

   * Increased tax complaince by people of Ireland .

* Increased consumption level of goods .

ii ) Revenue Opportunity

    * Increased revenue can be used for more investment. Investment will increase output , income and will generate employment and thus further revenue for goverment.

Challenges

* Increased income can be used for giving better health coverage to population, good education etc.

I think government must invest because with it employment opportunities will increase which will generate more tax to government and government can use that to undertake more expenditure as discussed above in second cycle.

b) Price elasticity of demand tells us how will demand change if we increase price of good . For inelastic demand price increase don't have much effect on quantity demanded. Similarly for elastic demand increase in price will have higher effect on demand. So Revenue generated would be lesser in case of elastic demand .

So FM must increase tax on good with inelastic demand and lower tax on goods with elastic demand.

c) Quantitative easing is a sort of expansionary monetary policy in which goverment purchases government securities or other securities to lower interest rate and increase money supply .

Government undertake such policy when it wants to lower interest rate to boost investment in economy. This is used to lower interest rate in economy without printing new money.

Japan first used quantative easing to boost their economy in 2001 but interest rate fall close to zero without boosting economy.

Fed used quantative easing to boost economy during recession of 2097-08 to boost economy . US has boosted their economy and now fed has been slowly moving away from quantative easing to make dollar stronger and boost inflow of Foreign institutional investor .

Europeean zone has been successfully using quantative easing to boost their economy.

** Please write for more clarification . Kindly upvote if possible. Thanks.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.