Suppose the IRS were to introduce a tax exemption for portion of interest income earned on corporate bonds. This would
A) reduce the user cost of capital.
B) raise the marginal product capital.
C) raise the rate of depreciation.
D) All of the above are correct.
A
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Which of the following is NOT a potential impact of a rent ceiling set below the equilibrium rent?
A) a surplus B) an increase in search C) a deadweight loss D) None of the above because they are all impacts of a rent ceiling set below the equilibrium rent.
In a large open economy ________
A) the effect of shifts in saving and investment on the trade balance are in the same direction as in a closed economy B) the effect of shifts in saving and investment on net capital flows are in the same direction as in a closed economy C) the effect of shifts in saving and investment on the domestic real interest rate and the actual levels of saving and investment are in the same direction as in a closed economy D) all of the above E) none of the above