AP Macroeconomics Question 436: Answer and Explanation
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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.