If the government provides an investment tax credit and increases income taxes,

Question

Quizplus · Accepted Answer

The effects on real GDP and the price level cannot be determined solely from the information given. The investment tax credit could stimulate investment and potentially lead to an increase in real GDP, but the increase in income taxes could reduce consumption and potentially decrease real GDP. The price level could be affected by a variety of factors, such as changes in production costs or aggregate demand, and cannot be predicted based solely on the provided information.

If the Government Provides an Investment Tax Credit and Increases