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Home Essay Assignment

Instructions

Write your answers to the essay question and submit your answers to your
Economics representative BEFORE your Economics lecture slot on 11th February
2015, Wednesday.

Economics Representatives, please collect all scripts before the Economics Lecture
on 11th February and submit the scripts with a class list on top clearly indicating who
has or has not submitted. Submission MUST be done BEFORE the lecture starts.

Deadline for submission: 11th February 2015, Wednesday at the start of Economics
Lecture.

Question

As Japan slipped into a recession, the government of Japan announced subsidies for the
poor and a cut in corporate income tax in a bid to encourage economic activity.
Bloomberg, 30 Dec 2014

(a)

Explain how subsidies for the poor and a cut in corporate income tax might
[10]
affect the equilibrium national income of a country.



(b) Discuss whether a recession would mean a decline in the standard of living for
[15]
an average person in Japan.