AP Macroeconomics Question 436: Answer and Explanation

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Question: 436

11. Which of the following is most likely to produce stronger economic growth over time?

  • A. More rapid consumption of natural resources.
  • B. Higher adult illiteracy rates.
  • C. A falling stock of capital goods.
  • D. Investment tax credits.
  • E. Higher taxes on foreign capital investment.

Correct Answer: D


D-Investment tax credits provide incentives for firms to invest in capital equipment and new factory construction. This policy stimulates economic growth and productivity.