Complete the following table by indicating how this policy affects national saving, domestic investment, net cap/tal outflow, the real interest rate, the exchange rate, and the trade balance Increase Decrease National saving Domestic investment Net capital outflow Real interest rate Exchange rate Trade balance True or False: As a result of the investment tax credit, exports to other countries increase. O True O Faise

Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
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Chapter14: A Macroeconomic Theory Of The Open Economy
Section: Chapter Questions
Problem 1CQQ
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2. Problems and Applications Q2
Suppose that Congress is considering an investment tax credit, which subsidizes domestic investment.
Complete the following table by indicating how this policy affects national saving, domestic investment, net cap/tal outflow, the real interest rate, the
exchange rate, and the trade balance
Increase
Decrease
National saving
Domestic investment
Net capital outflow
Real interest rate
Exchange rate
Trade balance
True ar False: As a result of the investment tax credit, exports to other countries increase.
O True
O False
Transcribed Image Text:2. Problems and Applications Q2 Suppose that Congress is considering an investment tax credit, which subsidizes domestic investment. Complete the following table by indicating how this policy affects national saving, domestic investment, net cap/tal outflow, the real interest rate, the exchange rate, and the trade balance Increase Decrease National saving Domestic investment Net capital outflow Real interest rate Exchange rate Trade balance True ar False: As a result of the investment tax credit, exports to other countries increase. O True O False
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