2. Suppose the government implements a policy that increases taxes on business investments and increases consumption tax at the same time. Use the market for financial capital to briefly explain the effect of this policy on the real interest rate and Investment in the economy?
2. Suppose the government implements a policy that increases taxes on business investments and increases consumption tax at the same time. Use the market for financial capital to briefly explain the effect of this policy on the real interest rate and Investment in the economy?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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2. Suppose the government implements a policy that increases taxes on business investments and increases consumption tax at the same time. Use the market for financial capital to briefly explain the effect of this policy on the real interest rate and Investment in the economy?
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