Business, 02.10.2019 05:30 ehensl06

Suppose congress institutes an investment tax credit. what would happen in the market for loanable funds? (a) the interest rate and investment would fall. (b) the interest rate and investment would rise. (c) the interest rate would rise and investment would fall. (d) none of the above is necessarily correct.

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Answer from: ayri9893

B. The interest rate and investment would rise.

Explanation:

In the loanable funds market, the supply is made up of the savings that all of us deposit in the banks and that they then lend; while the demand is equivalent to the amount of real loans made to firms and households (borrowing), which use them to make investments. On the other hand, the price of loans is the real interest rate (you can see the graph attached, it´s the first one).

An Investment Tax Credit is a fiscal stimulus that consists of a reduction in corporate taxes based on the cost and useful life of certain assets. That way, firms will have incentives to invest more, especially in the purchase of new assets, which will expand their chances of enjoying the tax benefit.

This translates as follows in the loanable funds market: to carry out their investments, companies will borrow more resources, which will increase the demand for loanable funds (an increase in demand can be illustrated by a shift in the demand curve to the right). In turn, this will raise the real interest rate. Theoretically, this means that the higher the interest rate, the more expensive it is to borrow.

(You can see the graph attached as well, it´s the second one).

Suppose congress institutes an investment tax credit. what would happen in the market for loanable f

Answer from: Quest

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7. customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

your welcome leave a rate and a < 3

Answer from: Quest

the correct answer is - no.

winnipeg, canada, is not further away from the equator than moscow, russia, in fact moscow is the city that is further away from the equator. moscow is on a latitude of 55.7558° north, while winnipeg is on a latitude of 49.8951° north, thus putting moscow by 5.8607° further away from the equator than winnipeg is.

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