• Aggregate Demand and Fiscal Policy in Recessionary Times
  [Suggested word count for Q1: 400 to 500 words]
  2020 was a difficult year, and the economy was technically in a recession.
  However, the economy has been recovering from this recession due to the
  timely and effective fiscal stimulus measures adopted by the government.
  A. Use the AD (Aggregate Demand) model to show the impact of the
  decline in consumption and investment on the economy in 2020. Show
  how the fiscal stimulus measures that the government adopted, helped
  the economy to stabilise in 2021. On the same diagram, illustrate and
  explain the process of the multiplier.
  B. Now assume hypothetically, if the government would have cut the
  government spending to reduce the levels of debt and to improve their
  budget balance in 2021. Comment on what would be the possible
  implications of such an early withdrawal of support in the economy. (No
  diagram required for this question).
  Q2 – Unemployment and the WS/PS model in a Post-COVID-19 world
  [Suggested word count for Q2: 300 to 400 words]
  Pandemic containment policies have cut global production which has led to
  rising unemployment in 2020. However, some predict that the coronavirus
  pandemic might stimulate innovation and help workers become more
  productive, e.g. see:
  How Innovation Is Driving Productivity During And Beyond The COVID-19 Pandemic
  Have we just stumbled on the biggest productivity increase of the century?
  In this context, use the WS/PS model to illustrate and explain in some detail
  what happens to an economy’s equilibrium unemployment in a post-COVID-19
  world.
  Q3 – Inflation and the Phillips Curve
  [Suggested word count for Q3: 300 to 400 words]
  Assume an economy at labour market equilibrium with stable prices (inflation is
  zero) prior to COVID-19. Due to COVID-19, investment declines, and the
  economy moves into recession with high unemployment. Use the WS/PS/AD
  model to show why and how this would result in a negative bargaining gap.
  Q4 – Monetary Policy Response to the Recent Negative Shock
  [Suggested word count for Q4: 300 to 400 words]
  Expansionary monetary policy has been widely used as a tool recently by the
  central Banks around the world in response to the global pandemic led by
  COVID-19. However, there is an argument that the central banks will probably
  need to aim for a higher level of inflation, as advanced capitalist economies
  attempt to recover from the negative shock, according to these articles:
  https://www.abc.net.au/news/2020-08-28/us-central-bank-fed-landmark-policy-shift-on-inflation/12602362
  Page 1 of 2
  https://theconversation.com/keating-is-right-the-reserve-bank-should-do-more-it-needs-to-aim-for-more-inflation-146393
  Explain how the transmission mechanism of monetary policy works in a
  recessionary environment to stimulate aggregate demand (AD)? How effective
  were the reductions in nominal interest rates for Australian economy in the
  current global pandemic that started in 2020?

Sample Solution

The post Demand and Fiscal Policy in Recessionary Times appeared first on homework handlers.

Suppose you are a CPA, and you have a corporate client that has been operating for several years. The company is considering expansion through reorganizations. The company currently has two subsidiaries acquired through Type B reorganizations. The client has asked you for tax advice on the benefit of a Type A, C, or D reorganization over a Type B reorganization. Additional facts regarding the issues are reflected below.
The company currently files a consolidated income tax return with the two subsidiaries acquired through a Type B reorganization.
ABC Corporation, a subsidiary targeted by the client for takeover, has substantial net operating losses.
XYZ Corporation and BB Corporation will be acquired as subsidiaries in the next six months.
INSTRUCTIONS
Use the Internet and Strayer Library to research the rules and income tax laws regarding Types A, B, C, and D reorganizations and consolidated tax returns. Be sure to use the six-step tax research process in Chapter 1 that was demonstrated in Appendix A of your textbook as a guide for your written response.Write a 4–6 page paper in which you:
Compare the long-term tax benefits and advantages of each type of reorganization and recommend the type of reorganization that will be most beneficial to the client.
Suggest the type of reorganization the client should use for the ABC Corporation based on your research. Justify the response.
Propose a taxable acquisition structure for the client’s planned acquisitions over a nontaxable reorganization. Assess the value of a taxable transaction over a nontaxable reorganization for the client.
Examine the value and limitations of including the ABC Corporation if acquired as a wholly owned subsidiary in the consolidated return and provide a recommendation to your client. Support the recommendation with applicable research.
Create a scenario that will allow the client to reduce any disadvantages from filing a consolidated return as a member of a controlled group.

Sample Solution

The post REORGANIZATIONS AND CONSOLIDATED TAX RETURNS appeared first on homework handlers.