(Solved): AUS Dr. Louis Jaeck Visiting assistant professor 3 Explain why decreasing the government budget defi ...

AUS Dr. Louis Jaeck Visiting assistant professor 3 Explain why decreasing the government budget deficit can increase investment spending. (2 marks) 4/ In 2003, Congress passed a tax increase that included a rise in the marginal tax rate on stock dividends. This essentially reduced the after-tax rate of return on stocks that offer dividends. Using the loanable funds market, describe what will happen to saving, investment, economic growth, the real interest rate, and the quantity of loanable funds exchanged. ( 4 marks)