Register
Suppose a country repealed its investment tax credit. The effects of this are represented by shifting the:___________ a) demand for and the supply of loanable funds to the right. b) demand for and the
211k views
2 votes
Suppose a country repealed its investment tax credit. The effects of this are represented by shifting the:___________ a) demand for and the supply of loanable funds to the right. b) demand for and the supply of loanable funds to the left. c) supply of loanable funds to the right and the demand for loanable funds to the left. d) None of the above is correct.

User Gauravg
by
2.9k points

1 Answer

6 votes

Answer:

a. The demand for loanable funds would shift left.

Step-by-step explanation:

Investment tax credit is a form of tax relief for businesses where a business can deduct part of their investment cost from their taxes. They are tax incentive that promotes business investment.

If the government revokes investment tax credit businesses will have reduced investment as a result.

Businesses will less willing to borrow funds for investment purposes because when they compare the return on investment and the interest rate paid on loanable finds, it will not be an attractive option to get funds.

Suppose a country repealed its investment tax credit. The effects of this are represented-example-1
User Denger
by
4.2k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

3.4m questions

4.3m answers

Other Questions

How can expansionary​ expenditure-based fiscal policy lead to crowding out in the​ economy? A. ​Expenditure-based fiscal policy increases the national​ debt, inducing​ forward-looking households and firms
Stevenson Company purchased equipment for $250,000 on January 1, 2010. The estimated salvage value is $50,000, and the estimated useful life is 5 years. The straight-line method is used for depreciation.
In order to attract younger customers to the Lacoste brand of clothing, CEO Robert Siegel made all of the major decisions in product planning, distribution, and promotion. He asked for no input from his
The method of appraisal in which the appraiser estimates the replacement cost of the building, deducts depreciation, and adds the value of the site is:________
The Yum and Yee food truck near the business school serves customers during lunch hour by taking orders and making fresh batches of stir-fry. Customers have only one choice during the lunch hour so that
Link Copied!