What is the price of investment? How are they related? What has to be done to increase investment?
The real interest rate is the price of investment. Interest rate and investment are negatively related. Because businesses often borrow to finance their investments, and the real interest rate indicates how much firm must pay for that privilege. The lower the real rate of interest, the more investment spending there will be. An investment project that looks unattractive at an interest rate of 10 percent may look highly profitable if the firm has to pay only 6 percent. The most obvious way to increase investment by private businesses is to lower real interest rates.
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A decrease in the price of inputs will cause the supply curve for a product to shift to the right
Indicate whether the statement is true or false
Which of the following is true?
a. A bondholder owes money to a corporation. b. A corporation owes money to a bondholder. c. A bondholder owns part of a corporation. d. A bondholder votes on company management.