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In the Long-Run ISLM Model and with Everything Else Held

question 58

Multiple Choice

In the long-run ISLM model and with everything else held constant,the long-run effect of an autonomous increase in investment is to ________ real output and ________ the interest rate.


Definitions:

Tax Rate

The rate at which a person or business is charged taxes by the state.

CCA Class

This refers to a categorization system used for tax purposes to group depreciable assets by their useful life, affecting how capital cost allowance is calculated.

Net Advantage

The overall benefit or profit derived from making a particular investment decision, considering all financial impacts.

Corporate Tax Rate

The percentage of corporate profits that is paid to the government as tax, varying by country and sometimes by the size or type of corporation.

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