If the Return on Capital Is 12 Percent and the Price

question 91

Multiple Choice

If the return on capital is 12 percent and the price for loanable funds is 9 percent, then

• A)firms will not be willing to borrow loanable funds until either the return on capital decreases or the price for loanable funds increases, because the market for loanable funds is not in equilibrium and businesses will be wary of further investment.
• B)firms will realize that if they borrow loanable funds and invest in capital goods, it will cause the return on capital to decrease, so they won't want to borrow the funds.
• C)savers will realize that they can earn more if they invest their savings in capital, so they will withdraw their savings and supply them to firms at 14 percent.
• D)firms will borrow in the loanable funds market and invest in capital.

---

Definitions:

Body Build

The physical composition of an individual, including their muscle, bone, and fat distribution, which can influence their physical capabilities and appearance.

Extremities

The furthest points or limits of something; can also refer to limbs of the body, such as hands and feet.

Macroevolution

Large-scale evolutionary changes that occur over geological time, leading to the emergence of new species and broader taxonomic categories.

Speciation

The evolutionary process through which new biological species arise due to the divergent evolution of populations that become reproductively isolated from each other.