Firm Investment Depends Most Strongly on Which of the Following

question 164

Multiple Choice

Firm investment depends most strongly on which of the following?

• A) The federal funds rate
• B) The long-term nominal interest rate
• C) The inflation rate
• D) The long-term real interest rate

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Definitions:

Payor Bank

A bank that is responsible for paying a check or draft presented for payment against an account.

Depositary Bank

A financial institution that holds securities, such as stocks or bonds, in electronic or physical form, for investors.

Cashier's Check

A check guaranteed by a bank, drawn on the bank's own funds and signed by a cashier.

Point-Of-Sale System

An EFT system that enables consumers to directly transfer funds from a bank account to a merchant.