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TCC Jhoel v My Home Courses 0 Home Page - Tarrant County College CENGAGE I MINDTAP Homework (Ch 13) a ng.cengage.com Homework (Ch 13) indTap - Cengage Learning Q Search this course CQ Catalog and Study Tools Rental Options College Success Tips Career Success Tips Help Give Feedback Scenario 1: Suppose savers either buy bonds or make deposits in savings accounts at banks. Initially, the interest income earned on bonds or deposits is taxed at a rate of 18%. Now suppose there is a decrease in the tax rate on interest income, from 18% to 14%. Shift the appropriate curve on the graph to reflect this change. This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to spending to A-Z and the level of investment Scenario 2: An investment tax credit effectively lowers the tax bill of any firm that purchases new capital within some relevant time period. Suppose the government repeals a previously existing investment tax credit. Shift the appropriate curve on the graph to reflect this change. The repeal of the previously existing tax credit causes the interest rate to and the level of investment to Scenario 3: Initially, the government's budget is balanced; then the government significantly increases spending on national defense without changing taxes. This change in spending causes the government to run a budget Shift the appropriate curve on the graph to reflect this change. , which This causes the interest rate to the level of investment spending. national saving. Grade It Now Save & Continue Continue without saving