Asked by
Killa Richie DaBoot
on Dec 17, 2024Verified
If the government instituted an investment tax credit, then which of the following would be higher in equilibrium?
A) Saving and the interest rate
B) Saving but not the interest rate
C) The interest rate but not saving
D) Neither saving nor the interest rate
Investment Tax Credit
A fiscal policy tool used to encourage companies to invest by providing a tax rebate on their investments.
Equilibrium
A state in a market where supply equals demand, and there is no incentive for price to change, leading to market stability.
Interest Rate
A lender's charge to a borrower, represented as a percentage of the principal amount, for the privilege of borrowing assets.
- Comprehend the role of investment tax credits in economic policy.
Verified Answer
LN
Learning Objectives
- Comprehend the role of investment tax credits in economic policy.