Answer to Question #300072 in Macroeconomics for Nida

Question

Assess the possible measures which the government might use to persuade passengers to travel by rail rather than other forms of transport. In your answer you should consider any disadvantages of these measures as well as the positive benefits and should include a discussion of taxes, subsidies, price controls or changing the cost of other forms of transport relative to rail travel 

Answer 1

The government might set taxes on railway transportation, give subsidies or try to decrease costs to passengers or producers of other types of transportation to persuade passengers to travel by rail rather than other forms of transport.