The market interest rate
a. represents the opportunity cost of investing with borrowed funds
b. has no impact on the firm's investment decision if the firm uses borrowed funds
c. represents the opportunity cost of investing with savings
d. has no impact on the firm's investment decision if the firm uses savings
e. represents the opportunity cost of investing with either borrowed funds or savings
E
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The difference between consumption and capital goods is that
A) only big corporations can afford capital goods. B) capital goods are used to produce additional goods while consumption goods are not. C) capital goods are provided by the government. D) consumption goods can be enjoyed by many people at the same time. E) it is illegal to export capital goods.
When an economy produces at its allocatively efficient production point
A) scarcity is not a problem. B) resources are not limited. C) a society can increase the production of all goods. D) a society can increase the production of one good only by decreasing the production of some other good that is valued more highly.