The initial impact of an increase in an investment tax credit is to shift aggregate
A)demand right.
B)demand left.
C)supply right.
D)supply left.

Question

Quizplus · Accepted Answer

An increase in an investment tax credit makes investments cheaper for firms, encouraging them to invest more. This increase in investment spending directly increases aggregate demand, shifting the aggregate demand curve to the right.

The Initial Impact of an Increase in an Investment Tax