Which of the Following Events Could Explain a Decrease in Interest

question 195

Multiple Choice

Which of the following events could explain a decrease in interest rates together with an increase in investment?

• A)The government went from surplus to deficit.
• B)The government instituted an investment tax credit.
• C)The government reduced the tax rate on savings.
• D)None of the above is correct.

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Definitions:

Capital Investment

Funds expended by a business to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Robinson Crusoe

Used in economics as a metaphor for the study of decision making by individuals in solitude.

Sacrificed

Sacrificed refers to giving up something valued for the sake of other considerations or needs, often in the context of making difficult decisions.

Opportunity Cost

The value of the next best alternative that is foregone as a result of making a decision.