If the Vertical Axis of a Demand Curve for Capital

question 156

Multiple Choice

If the vertical axis of a demand curve for capital is represented by the price of capital goods (rather than the interest rate) , then a rise in the interest rate would:

• A) shift the newly defined demand curve for capital to the right.
• B) shift the newly defined demand curve for capital to the left.
• C) not change the newly defined demand curve for capital.
• D) do none of the above.

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