A Rise in the Real Rate of Interest ________ the Opportunity

question 111

Multiple Choice

A rise in the real rate of interest ________ the opportunity cost of holding an inventory of a given size,and therefore ________ desired investment expenditure.

• A)increases; increases
• B)increases; decreases
• C)decreases; increases
• D)decreases; leaves unaffected
• E)decreases; decreases

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Definitions:

Veil of Ignorance

A philosophical concept proposed by John Rawls suggesting that decisions should be made without the decision-makers knowing their status, to ensure fairness and equity in moral judgments.

Abstract Nature

The quality of being abstract; not representing or imitating external reality or the objects of nature.

Equality

The state, quality, or ideal of being equal, especially in status, rights, and opportunities.

Fairness

The quality of making judgments that are free from discrimination or bias, ensuring equal treatment for all.