If Congress wants to stimulate the economy, explain how it might alter each of the following:
(a) Personal and corporate tax rates,
(b) Depreciation schedules,
(c) The differential between the tax rate on personal income and long-term capital gains. How would these changes affect corporate profitability and free cash flow? How would they affect investors’ choices regarding which securities to hold in their portfolios? Might any of these actions affect the general level of interest rates?