A Higher Interest Rate Will Lead a Firm to Purchase

question 20

Multiple Choice

A higher interest rate will lead a firm to purchase less capital because the higher interest rate

• A)lowers the marginal product of capital goods
• B)causes technological change to cease
• C)lowers the present value of capital goods
• D)causes economies of scale to be exhausted
• E)causes the capital market become monopolized

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Definitions:

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