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Scenario 2: An investment tax credit effectively lowers the taxes paid by firms that purchase new equlpment or build a new manufacturing facility. Suppose the

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Scenario 2: An investment tax credit effectively lowers the taxes paid by firms that purchase new equlpment or build a new manufacturing facility. Suppose the government implements a new investment tax credit. The implementation of a new tax credit causes borrowers to demand loanable funds. Because the quantity of loanable funds demanded is now the quantity of loanable funds supplied, there is a(n) in the quantity of loanable funds supplied

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