A number of states have legalized marijuana. Describe the impact an measured U.S

Question

A number of states have legalized marijuana. Describe the impact an measured U.S GDP using precise economic concepts. Clearly indicate your reasoning and explicitly state all assumptions key to your analysis. 2. What is the key ingredient in long run economic growth? Explain the differences in growth rates between countries based on this source of economic growth and the three main economic factors that affect the rate of growth.[Be sure to indicate how economic growth is measured and define major concepts used.]

Explanation / Answer

There are two aspects of the benefits of ligalizing Marjuana, these are cost and tax. As after legalizing there is no need of law inforcement to stop illegal trading marijuana. US govenment saves lots of money. This cuts expenditure and can be utilized in government expenditure. This results in increse in GDP. As marjuana becomes a new industry, there should opportunity to create new employment, that increases consumption expenditure and also GDP.

Tax revenue increases in total as government starts to collect the tax from pproduction and distribution. But too much tax creates black market. So optimal tax rate should be determined.

As marijuana is producing and selling in US market then gross domestic product seriously increases. Therefore we can argue that ligalizing marjuana contributes positively in US GDP.

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