Question
Asked Nov 24, 2019
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Identify how planned investment will change in each scenario.
 
In an effort to reduce constant budget deficits, Congress announces plans to increase the corporate income tax rate.
Due to the Congress, planned investment will increase, decrease, or stay the same?
 
A major recession has reduced consumption spending, which has hurt profit levels for Aston-Benz, a high-end car manufacturer. Due to the recession, planned investment will increase, decrease, or stay the same?
 




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Expert Answer

Step 1

To identify the change in planned investments.

Step 2

If the tax rate is increased, then the corporates will see this increased tax as reduced profits. As a result of this the disposable income...

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