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If the Government Offers Firms Investment Tax Credits for Building

Question 98

Multiple Choice

If the government offers firms investment tax credits for building new factories, the after-tax rate of return _____, causing the loanable funds _____ curve to shift _____, leading to _____ interest rates.


A) rises; demand; rightward; higher
B) rises; demand; leftward; higher
C) falls; demand; leftward; lower
D) rises; supply; rightward; lower

Correct Answer:

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