If the Government Provides an Investment Tax Credit and Increases

Multiple Choice

If the government provides an investment tax credit and increases income taxes,

A) real GDP rises, and the price level could rise, fall, or stay the same.
B) real GDP falls, and the price level could rise, fall, or stay the same.
C) the price level rises and real GDP could rise, fall or stay the same
D) None of the above are necessarily correct.