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Initially,there is a trade deficitin a small open economy with perfect capital mobility.Suppose an investment tax credit is introduced to give a tax advantage to

Initially,there is a trade deficitin a small open economy with perfect capital mobility.Suppose an investment tax credit is introduced to give a tax advantage to any firm building a new factory or buying a new piece of equipment.Which of the following statement is correct?

Investment decreases.

Investment remains unchanged.

Investment increases.

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