The Interest-Rate Cost-Of-Funds Curve Is Perfectly Elastic Because Expected Rates

question 8

True/False

The interest-rate cost-of-funds curve is perfectly elastic because expected rates of return on R&D are constant.

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Definitions:

Interest-Rate Cost

The cost associated with borrowing funds, typically expressed as a percentage of the total amount loaned.

Expected Rate

Expected rate often refers to the anticipated return on an investment or the predicted growth rate of an economic variable over a certain period.

Optimal Amount

The most efficient, beneficial, or ideal quantity of a good, service, or resource allocation under given circumstances.

Perfectly Elastic

Describes a situation in economics where the quantity demanded or supplied changes infinitely in response to any change in price.