use supply and demand analysis to predict the resulting changes in the real interest rate, national saving, and investment.

Show all diagrams. Diagrams may be hand drawn but must be neatly presented. You may find it easiest to draw your graphs on paper, take a photo, and upload the file to support your written answers. If you are familiar with a digital drawing tool, that is also an option. All elements of each graph should be fully labeled.

1. The legislature passes a 10 percent investment tax credit. Under this program, for every $100 that a firm spends on new capital equipment, it receives an extra $10 in tax refunds from the government.