Increases in the Rate of Interest

question 5

Multiple Choice

Increases in the rate of interest

• A) make it more profitable for firms to invest in new projects.
• B) raise the expected rates of return on existing projects.
• C) cause net investment to exceed gross investment.
• D) raise the equilibrium levels of GDP.
• E) tend to reduce the amount of investment.

Understand the concept of price discrimination and its conditions.

Identify factors influencing a firm's decision to engage in price discrimination.

Recognize how price discrimination affects consumer prices based on demand elasticity.

Distinguish between necessary and unnecessary conditions for effective price discrimination.