Suppose that Congress is considering an investment tax credit, which subsidizes domestic investment. Which of the following
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Question:
Suppose that Congress is considering an investment tax credit, which subsidizes domestic investment.
Which of the following accurately describes the effect of an investment tax credit? Check all that apply.
Domestic investment increases
National saving decreases
Net capital outflow decreases
Real interest rate decreases
Exchange rate increases
Trade balance decreases
True or False: As a result of the investment tax credit, exports to other countries decrease.
True
False
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