Temporary Tax Breaks Such as the Increase in Depreciation Will

question 57

Multiple Choice

Temporary tax breaks such as the increase in depreciation will tend to

• A) increase investment expenditures because the tax breaks will entice firms to leave other countries and invest in Canada.
• B) have little impact on current investment expenditures since the tax breaks are temporary.
• C) increase investment expenditures in both the short run and the long run, since investment is irreversible.
• D) increase investment expenditures in the short run but also increase the uncertainty and volatility of investment since the tax breaks are temporary.

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