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The US Government Provides a Research and Development Tax Credit

Question 5

Multiple Choice

The U.S. government provides a research and development tax credit. How can this policy encourage economic growth?


A) Firms get tax credits for sourcing inputs locally, and this encourages local economic growth.
B) It encourages firms to engage in innovation and creative practices, which lead to technological advances that spur economic growth.
C) It supports firms in their efforts to produce environmentally friendly products and services.
D) Firms are encouraged to reuse existing capital, and this leads to a more efficient use of existing capital.

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