Suppose a Developing Country Decides to Institute an Investment Tax

question 52

Multiple Choice

Suppose a developing country decides to institute an investment tax credit. As a result, what is most likely to happen?

• A) Interest rates would rise, and investment would fall.
• B) Interest rates would fall, and investment would rise.
• C) Both interest rates and investment would fall.
• D) Both interest rates and investment would rise.

---

Definitions:

Inaugural Address

A ceremonial speech given by a newly inaugurated or sworn-in head of state, often outlining the leader's intended policies and objectives.

Soviet Union

A socialist state that existed from 1922 to 1991, officially known as the Union of Soviet Socialist Republics (USSR), comprising Russia and several other republics.

Consumer Culture

A societal framework in which buying and using goods and services is promoted as a primary social and economic activity.

Great Depression

Worst economic depression in American history; it was spurred by the stock market crash of 1929 and lasted until World War II.