Other things equal, a 10 percent decrease in corporate income taxes will
A) decrease the market price of real capital goods.
B) have no effect on the location of the investment demand curve.
C) shift the investment demand curve to the right.
D) shift the investment demand curve to the left.

Question

Quizplus · Accepted Answer

A decrease in corporate income taxes would increase the after-tax profits of firms, making investment more profitable, which would shift the investment demand curve to the right.

Other Things Equal, a 10 Percent Decrease in Corporate Income