A decrease in the interest rate results in
A. a greater opportunity cost of investment and so planned investment spending increases.
B. a smaller opportunity cost of investment and so planned investment spending decreases.
C. a smaller opportunity cost of investment and so planned investment spending increases.
D. a greater opportunity cost of investment and so planned investment spending decreases.
Answer: C
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Firms have tried a number of different strategies to reduce the negative effects of competition on their ability to earn economic profits
Which of the following strategies is most desirable from the viewpoint of economic efficiency and consumer well being? A) Collusion. B) Price leadership. C) Formation of cartels. D) Investment in research and development.
Keynesian economists argue that monetary policy works through its effects on:
a. interest rates and investment. b. price- and wage-flexibility. c. budget deficits and trade deficits. d. the spending and money multipliers.