The reduction of a firm's tax liability by a fraction of its investment during a period is a(n)

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The reduction of a firm's tax liability by a fraction of its investment during a period is known as an investment tax credit. This is a tax incentive provided by the government to encourage businesses to invest in certain activities or purchases, such as research and development, equipment upgrades, or renewable energy systems. By offering this credit, the government hopes to stimulate economic growth and innovation.

The Reduction of a Firm's Tax Liability by a Fraction