Assume That Some Large Foreign Countries Begin to Subsidize Investment

question 87

Multiple Choice

Assume that some large foreign countries begin to subsidize investment by instituting an investment tax credit. Then, if world saving does not depend on the interest rate, world investment:

• A) will rise and small country investment will fall.
• B) will rise and small country investment will remain unchanged.
• C) will remain unchanged and small country investment will fall.
• D) and small country investment will both remain unchanged.

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Definitions:

Assets

Resources owned by a company that have economic value and can provide future benefits, including cash, property, and equipment.

Financial Statements

These are written records that convey the business activities and the financial performance of a company, including the balance sheet, income statement, and cash flow statement.

Statement

A formal record that summarizes financial activities or conditions, such as an income statement, balance sheet, or cash flow statement.

Financial Statements

Formal records of the financial activities and position of a business, individual, or other entity.