The government budget is balanced when tax receipts equal government spending.

An investment tax credit ________

A) is designed to incentivize higher capital stock expenditures at any given interest rate B) may lead to increases in autonomous investment C) may put upward pressure on the interest rate D) all of the above E) none of the above

Explain how each of the following could discourage economic growth:

a. The government closes all of the schools so that more people will be available for work. b. The country fears military invasion and spends half of its income on military goods.