Answer the following questions:

a)COVID-19 has sent the economy of Classica into recession. The finance ministry has advised the government to lower stamp duty and other purchase service charges for those wanting to buy existing houses in order to boost economic growth. As well, the finance ministry wants the government to also cut company taxes as this will lead to firms increasing their level of investment in the economy. The President of Classica has asked you, as her chief economic advisor, for your views. In particular, she wishes to know the following:

(i) Would a cut in stamp duty and other purchase charges on the purchase of existing houses really boost the economy? Your advise on this please explain in detail.

(ii) Is the claim that lower company taxes adding to investments correct or is it debatable given the prediction on economic growth remains negative, and can you explain why? Your advise on this is please explain in detail.

(b) Your father has just stated that countries with high levels of debt-to-GDP ratios are poor countries and that countries with low levels of debt-to-GDP ratios are rich countries. Explain why you agree or disagree with this statement and provide real world evidence to support your argument.