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Assume That If the Interest Rate That Businesses Must Pay

question 246

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Assume that if the interest rate that businesses must pay to borrow funds were 20 percent, it would be unprofitable for businesses to invest in new machinery and equipment so that investment would be zero.But if the interest rate were 16 percent, businesses would find it profitable to invest $10 billion.If the interest rate were 12 percent, $20 billion would be invested.Assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate.Refer to the above information.Which of the following correctly expresses the indicated relationship as an equation?


Definitions:

Deductive Approach

The deductive approach is a logical process in research and reasoning that starts with a general statement or hypothesis and examines the possibilities to reach a specific, logical conclusion.

Sales Promotional Material

Documents or media utilized to increase awareness or sales of a product or service.

Counterproposal

An alternative proposal made in response to an original offer that does not meet one's satisfaction.

Legal Risks

Potential threats of legal action that could arise from engaging in certain behaviors or business practices.

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