The corporate tax system affects investment spending.I: More generous depreciation allowances lower the rental cost of capital.II: More generous depreciation allowances increase the effectiveness of a corporate tax rate cut as a mechanism for stimulating investment spending.
A) I is true; II is not.
B) II is true; I is not.
C) Both I and II are true.
D) Neither I nor II is true.
Correct Answer:
Verified
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