If a Budget Deficit Increases Interest Rates, It Is Possible

question 158

Multiple Choice

If a budget deficit increases interest rates, it is possible that investment will

• A)fall, leading to a larger capital stock.
• B)fall, so that there is a smaller capital stock.
• C)rise, because investment is directly related to interest rates.
• D)rise, because investment is more attractive when interest rates are higher.

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Definitions:

Conformers

Different spatial arrangements of atoms in a molecule that can be converted into one another by rotation around single bonds.

Butane

A gaseous hydrocarbon with the formula C4H10, existing in two isomeric forms and used as a fuel and a refrigerant.

Torsional Strain

A type of strain in molecules that occurs when atoms in a molecule are placed such that they cause repulsion by being in close proximity, often linked to bond angles and rotation around bonds.

Combustion

A chemical process that involves the rapid combination of a substance with oxygen to release heat and light.