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One Possible Disadvantage of a Cyclical Investment Subsidy Such as the Former

Question 31

Multiple Choice

One possible disadvantage of a cyclical investment subsidy such as the former Swedish Investment Funds System is that:


A) it is believed that investment does not respond to changes in the cost of capital.
B) if the economy begins to slow down,firms may anticipate a future subsidy and delay investment.
C) consumption should be encouraged,not investment.
D) most economists believe that the government should not try to control the business cycle.

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