SLP 3 - TUI UNIVERSITY Dean J Keveles Module 3 Session Long...

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TUI UNIVERSITY Dean J. Keveles Module 3 Session Long Project BUS305 Competitive Analysis and Business Cycles Dr. Danielle Babb July 31, 2011
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Effects of Fiscal Policy 1. Suppose the government imposes tax cuts for 95% of all households. How does this affect your firm? If we're talking tax cuts for households AND corporations, we could expect the Ford Corporation to expand. This would create more jobs in their research and Development department, as well as their Engineering department, if demand remains steady for automobiles and energy-efficient cars. However, more money in middle-class households can translate to more spending on personal transportation, thus increasing sales (demand) across the Ford inventory. Another effect of increased sales would be more jobs in sales, expanding dealership employment. Thus, a Ford Corporation expansion, due to increased revenue, through tax cuts and increased sales, improves overall American economy, and to those countries in which Ford has outsourced. If we're talking government-imposed tax cuts just to the consumer (personal income), Ford would still expand, but on a lesser scale. Sales would assuredly increase, based on an increased demand from a increase in household disposable income, as a result of lower taxes. It
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SLP 3 - TUI UNIVERSITY Dean J Keveles Module 3 Session Long...

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