Business, 06.02.2021 01:00 tiffanibell71
When the government subsidizes investment, such as with an investment tax credit, the subsidy often applies to only some types of investment. This question asks you to consider the effect of such a change. Suppose there are two types of investment in the economy: business investment and residential investment. The interest rate adjusts to equilibrate national saving and total investment, which is the sum of business investment and residential investment. Now suppose that the government institutes an investment tax credit only for business investment. a. How does this policy affect the demand curve for business investment
Answers: 1
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When the government subsidizes investment, such as with an investment tax credit, the subsidy often...
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