If the Interest Rate on a Loan Is Higher Than

question 136

Multiple Choice

If the interest rate on a loan is higher than the expected return from an investment,

• A) a rational firm will take out a loan for the investment.
• B) the Federal Reserve will conduct contractionary monetary policy.
• C) a rational firm will not take out a loan for the investment.
• D) the Federal Reserve will conduct expansionary monetary policy.
• E) the government will conduct expansionary fiscal policy.

---

Definitions:

Push System

A type of inventory control system where products are manufactured or acquired based on forecasted demand, pushing products towards the consumer without immediate demand signals.

JIT

Just-In-Time, a production strategy aimed at reducing in-process inventory and associated carrying costs by producing and delivering products just as they are needed.

Service Organizations

Entities that primarily offer intangible goods to consumers through the provision of services instead of physical products.

Competitive Advantage

The attributes that allow an organization to outperform its competitors, such as cost, product differentiation, and market access.