tax incentives and investment grants so that cost of r&d can be offset against pre-tax profits, reducing the firm's tax liability.
pre-tax profits....
firm's tax liability
net investment --> higher capital stock
shifts PPC Curve outwards
investment in human capital
expenditure of education
training facilities
programs
health services
increase flexibility mobility and productivity
research centers and training institutes
increase resource efficiency
industrial reorganization
changes in work practices
deregulation
privatization
mergers
promote competition and effciency
xinefficiency
small business starting
entrepreneurship
thecrowding out effect:
government spending drives up interest rates or having to raise taxes which in turn discourage private consumption and investments
dependence on the multiplier:
Singapore has High MPS due to savings scheme and MPM due to lack of natural resources. small multiplier might limit the effectiveness of demand side policies.
automatic fiscal stabilizers are components of the tax system and govt spending system that reduce cyclical fluctuations. not prevent!! just reduce.
progressive income tax system and transfer payments system
progressive is the opposite of regressive. the later exacerbates income inequity.
transfer payments in the form of welfare benefits, unemployment benefits, pensions
skills programme for upgrading and resilience
workfare bonus scheme
continuing education and training masterplan (CET)
prices and incomes policy to address cost push inflation
tax incentives to encourage production, training, competition
reducing union power to control inflation due to rising wages independent of productivity gained
boost employment by providing training and subsidies
encourage manpower planning
develop education programs to meet needs of Industries
system of patents and copyrights to incentives firms to innovate
direct provision of infrastructure
spending on training
spending on r&d to improve productivity
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