Suppose the government wants to increase the ability of families to pay for college education, and the
Fantastic news! We've Found the answer you've been seeking!
Question:
Suppose the government wants to increase the ability of families to pay for college education, and the government is considering two policy tools, one isa $500 income tax rebate, and the other one is a $500 tax credit for tuition reimbursement (namely, a $500 tax credit would only be received if the family spent $500 on tuition). Please answer the following questions.
Which policy tools is more effective in terms of driving up the demand for college education? In addition, which policy tools is likely to make families better off, as measured by a higher level of utility or happiness? Please explain why.
Posted Date: