ECO403 GDB 1 Solution and Discussion


  • Cyberian's Gold

    Total Marks 5
    Starting Date Monday, January 20, 2020
    Closing Date Tuesday, January 28, 2020
    Status Open
    Question Title Fiscal policy
    Question Description

    The Case:

    South Korea is 4th largest economy in Asia. This economy has a strong export base and skilled labor force. Important sectors of this economy are automobiles, shipbuilding, mining and tourism. South Korea achieved a landmark in tourism in November, 2012 by attracting 10.3 million visitors. It was the first time that the number of foreign tourists topped 10 million in a year. Suppose, in order to meet the expenditures faced by tourism department of South Korea Ministry of Culture, Sports and Tourism, government decides to increase the direct and indirect tax rate.

    Requirement:

    Keeping in view the above facts and figures, Explain logically that how would this strategy (Increase in taxation) affect the incomes and consumption of the people of South Korea?

    Note: Be specific in your answer. Write to the point in your own words. Avoid irrelevant details.



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