In order to increase the confidence of investors, the new President of Montesia provides lucrative tax incentives to its investors. This will result in a(n):
a. increase in the level of planned investment spending of firms
b. decrease in the level of investment spending that is financed through borrowed money.
c. decrease in the level of production of firms.
d. increase in the average price level of the economy.
a
You might also like to view...
The farmer pays 20 cents for the seed that is sold to the miller for 35 cents; the miller makes flour and sells it to the baker for 55 cents. The baker makes bread and sells it to the grocery store for 80 cents and the store sells it to consumers for $1.00. The contribution to Gross Domestic Product (GDP) is
a. $1 b. $2 c. $3 d. $4
Compared to other firms, firms that sell highly differentiated products likely incur significant costs associated with
a. advertising. b. the product-variety externality. c. intermediate materials. d. taxes and regulation.
Which type of tariff is used to offset subsidies on exports entering the United States?
a. antidumping duties b. countervailing duties c. export duties d. safeguard duties levied under the escape clause
Reducing the budget deficit by cutting government spending could conceivably:
A. increase income if interest rates rise enough and government spending is more productive than private investment. B. increase income if interest rates fall enough and private investment is more productive than government spending. C. decrease income if interest rates rise enough and private investment is more productive than government investment. D. decrease income if interest rates fall too much and private investment is more productive than government investment.