If the government wants to increase the level of employment and real output, it could
A) increase corporate income taxes.
B) provide an investment tax credit.
C) decrease expenditures on roads and schools.
D) increase the personal income tax.

Question

Quizplus · Accepted Answer

Providing an investment tax credit can encourage businesses to invest in new projects and create more employment opportunities, leading to an increase in real output. The other choices could have negative effects on employment and output, such as decreased expenditures on roads and schools leading to less government spending and potentially job loss, and increased taxes decreasing consumers' disposable income and potentially reducing demand for goods and services.

If the Government Wants to Increase the Level of Employment