Asked by Anonymous

Assume that some large foreign countries decide to subsidize investment by instituting an investment tax credit. Then the home country's real exchange rate will fall and its net exports will rise.

I completely don't understand the above statement because I don't know what investment tax credit is. What is it?
Answered by Ms. Sue
An investment tax credit reduces the amount of taxes paid to the government.

http://www.answers.com/topic/investment-tax-credit


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