Holding Other Factors Constant, If Congress Passes a 5% Investment

question 138

Multiple Choice

Holding other factors constant, if Congress passes a 5% investment tax credit under which a firm receives $5 in tax refunds from the government for every $100 it spends on new capital equipment, then the real interest rate will ________ and the equilibrium quantity of national saving and investment will ________.

• A)increase; increase
• B)increase; decrease
• C)increase; not change
• D)decrease; increase

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Definitions:

Alleviated

A condition or feeling that has been reduced in severity or intensity, often as a result of intentional actions or interventions.

Organizational Analyst

A professional dedicated to studying and improving the efficiency, structure, and operations of an organization through systematic review and analysis.

Agency Structure

The relationship and dynamics between an individual's capacity to act independently (agency) and the societal or contextual frameworks (structure) that influence or limit such actions.

Service Delivery

This concept involves the process of providing services to individuals or communities, focusing on effectiveness and efficiency.