On the basis of the recommendations of an 11-member committee, a decision was taken to offer tax

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Question:

On the basis of the recommendations of an 11-member committee, a decision was taken to offer tax benefit to the active pharmaceutical ingredients (API) and laboratory-reagents manufacturers.

The policy offers the API and laboratory-reagents manufacturers in the country corporate tax holiday facility until 2032. This includes exemption from paying advance income tax (AIT), value-added tax, and VAT deduction at source on the purchase and sales of raw materials and spare parts until 2032. The manufacturers will also get the duty-free facilities for import and priority for land allocation in the government's special economic zones and export processing zones.

API are the main raw materials used in the production of most drugs and policies such as this will increase the profitably of investment in current and future periods.
Based on the information above, answer the following questions [draw relevant diagrams to support your answer]:

1. How is the industrial investment affected in industries that receive tax credit incentives?
2. What type of output gap do you think might be created due to these types of investment?
3. How will this change the Real GDP and employment situation of the country?