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Suppose that Congress is considering an investment tax credit, which subsidizes domestic investment.

(a) How does this policy affect national saving, domestic investment, net capital outflow, the interest rate, the exchange rate, and the trade balance?

(b) Representatives of several large exporters oppose the policy. Why might this be the case?

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Nusrat Fatima
Nusrat FatimaLv10
28 Sep 2019

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Related questions

5. Suppose the U.S. Congress passes a budget which increases individual income

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billion. Use this information to answer the questions below. (20 pts)

a. At constant interest rates (“other things equal”), what would these policy

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Change in S =

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