Suppose that Congress is considering an investment tax credit, which subsidizes domestic investment. Which of the following accurately describes the effect of an investment tax credit? Check all that apply. Real interest rate increases Domestic investment decreases Net capital outflow decreases

Suppose that Congress is considering an investment tax credit, which subsidizes domestic investment. Which of the following accurately describes the effect of an investment tax credit? Check all that apply. Real interest rate increases Domestic investment decreases Net capital outflow decreases

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Ef 99.

Suppose that Congress is considering an investment tax credit, which subsidizes domestic investment.
Which of the following accurately describes the effect of an investment tax credit? Check all that apply.
Real interest rate increases
Domestic investment decreases
Net capital outflow decreases
National saving increases
Trade balance increases
Exchange rate decreases
True or False: As a result of the investment tax credit, exports to other countries increase.
True
False

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