Equilibrium quantity of national saving and investment

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Reference no: EM131387318

Holding other factors constant, if Congress passes a 5% investment tax credit under which a firm receives $5 in tax refunds from the government for every $100 it spends on new capital equipment, then the real interest rate will ______ and the equilibrium quantity of national saving and investment will _____.

A) increase; increase

B) increase; decrease

C) increase; not change

D) decrease; increase

Reference no: EM131387318

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