Assume that some large foreign countries begin to subsidize investment by instituting an investment tax credit. Then, if world saving does not depend on the interest rate, world investment:
A) will rise and small country investment will fall.
B) will rise and small country investment will remain unchanged.
C) will remain unchanged and small country investment will fall.
D) and small country investment will both remain unchanged.

Question

Quizplus · Accepted Answer

The Answer of Assume that some large foreign countries begin to subsidize investment by instituting an investment tax credit. Then, if world saving does not depend on the interest rate, world investment:
A) will rise and small country investment will fall.
B) will rise and small country investment will remain unchanged.
C) will remain unchanged and small country investment will fall.
D) and small country investment will both remain unchanged.

Assume That Some Large Foreign Countries Begin to Subsidize Investment