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Suppose That the US Offered a Tax Credit for Firms

Question 201

Multiple Choice

Suppose that the US offered a tax credit for firms who would build new factories in the US.Then,


A) the demand for loanable funds would shift right, initially creating a surplus of loanable funds at the original interest rate.
B) the demand for loanable funds would shift right, initially creating a shortage of loanable funds at the original interest rate.
C) the supply of loanable funds would shift right, initially creating a surplus of loanable funds at the original interest rate.
D) the supply of loanable funds would shift right, initially creating a shortage of loanable funds at the original interest rate.

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