A Lower Interest Rate Makes More Investment Projects Feasible,meaning That

question 105

Multiple Choice

A lower interest rate makes more investment projects feasible,meaning that:

• A)there is a direct relationship between the rate of interest and the quantity of investment spending.
• B)there is an inverse relationship between the rate of interest and the quantity of investment spending.
• C)there is no relationship between the rate of interest and the quantity of investment spending.
• D)the demand curve for investment spending is horizontal.
• E)the demand curve for investment spending is vertical.

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Definitions:

Inventories

Inventories consist of raw materials, work-in-progress, and finished goods held by a company during the production and sales process, awaiting sale.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor directly involved in creating the product.

Cash Dividends

Payments made by a corporation to its shareholder members out of its earnings. It represents a share of corporate profits.

Property, Plant, Equipment

Long-term tangible assets used in the operation of a business and not intended for resale.