Assume That a Firm's Interest-Rate Cost-Of-Funds Curve for R&D Is

question 206

Multiple Choice

Assume that a firm's interest-rate cost-of-funds curve for R&D is perfectly elastic. Which of the following would decrease a firm's optimal R&D expenditures and, in equilibrium, increase the expected rate of return on the last dollar of R&D?

• A)a rightward shift of the expected-rate-of-return curve
• B)an upward shift of the interest-rate cost-of-funds curve
• C)a leftward shift of the expected-rate-of-return curve
• D)a downward shift of the interest-rate cost-of-funds curve

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Definitions:

Stare Decisis

A principle in law where courts are bound by their own previous decisions or the decisions of higher courts in similar cases, ensuring legal consistency and predictability.

Erroneous Decisions

Decisions that are wrong or incorrect due to errors in judgement, fact, or procedure.

Private Law

A branch of law that governs relationships between individuals and entities, such as contracts, property, and family law, as opposed to public law which involves the state.

Equitable Remedy

A judicial order enforcing a right or redressing a wrong, granted when monetary damages are not sufficient as relief.