When Interest Rates Allocate Capital

question 100

Multiple Choice

When interest rates allocate capital

• A) many worthwhile projects fail to get funded and society is worse off.
• B) investment projects of firms tend to get funded while valuable social investments funded by the government tend not to get funded.
• C) only investment projects are funded for which the expected benefits of the projects equal or exceed the opportunity cost of the projects.
• D) there is an under investment in capital and overspending on durable consumer goods.

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