If the government allows business firms an investment credit to lower taxes, then
A) the user cost of capital declines and V* increases.
B) the user cost of capital declines and V* decreases.
C) the user cost of capital increases and V* decreases.
D) the user cost of capital increases and V* increases.
A
You might also like to view...
If the value of the government multiplier is 1.5, which of the following is likely to be true if all other variables remain unchanged?
A) A $1 increase in government expenditure reduces gross domestic product by $1.50. B) A $1.50 increase in government expenditure increases gross domestic product by $1.50. C) A $1.50 increase in government expenditure reduces gross domestic product by $1.50. D) A $1 increase in government expenditure increases gross domestic product by $1.50.
Overproduction results in
A) external costs. B) external benefits. C) deadweight loss. D) super-efficiency. E) the marginal benefit of the last unit produced being larger than the marginal cost.
Gross domestic product is the value of all final goods and services produced within a country during a given period of time
a. True b. False Indicate whether the statement is true or false
Unanticipated inflation tends to penalize:
A. people who save money in financial institutions. B. businesses that borrow money from financial institutions. C. individuals who borrow money from financial institutions. D. governments that have a progressive personal income tax.