Decreased corporate tax rate and its impact on the economy:

Reducing the corporate tax rate in an economy can have several effects on the overall investment and economic growth. Let's examine the reasons why the correct answer is option 'A' – it will increase the total investment in the economy.

1. Incentive for Businesses:
Lowering the corporate tax rate provides an incentive for businesses to invest more in the economy. When the tax burden on businesses is reduced, they have more funds available for investment and expansion. This encourages businesses to allocate a larger portion of their profits towards productive activities, such as research and development, infrastructure development, and capacity expansion.

2. Increased Disposable Income:
Lower corporate taxes can lead to increased disposable income for individuals. Businesses, having more funds at their disposal, can pass on these benefits to their employees in the form of higher wages, bonuses, or increased benefits. This additional income in the hands of individuals can stimulate consumption and drive economic growth, as people have more money to spend on goods and services.

3. Attraction for Domestic and Foreign Investors:
Reducing the corporate tax rate makes the economy more attractive for both domestic and foreign investors. Lower taxes increase the after-tax returns on investment, making it more lucrative for investors to allocate their capital in the country. This influx of investment can lead to the creation of new businesses, job opportunities, and overall economic growth.

4. Competitiveness:
Lowering corporate taxes can enhance the competitiveness of businesses in the global market. When the tax rate is reduced, businesses can reduce prices, increase investments in technology and innovation, and gain a competitive advantage over their counterparts in countries with higher tax rates. This can lead to increased exports, foreign exchange earnings, and overall economic development.

5. Encouraging Entrepreneurship:
Lower corporate tax rates can also encourage entrepreneurship and the formation of new businesses. When the tax burden is reduced, aspiring entrepreneurs are more likely to take the risk of starting their own ventures. This can lead to the creation of new jobs, innovation, and economic diversification.

In conclusion, decreasing the corporate tax rate in an economy can have a positive impact on the total investment and economic growth. It provides businesses with incentives to invest, increases disposable income, attracts domestic and foreign investors, enhances competitiveness, and encourages entrepreneurship. All these factors contribute to overall economic development and prosperity.