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:

Efficiency

The effectiveness with which resources are used to achieve goals and objectives, often evaluated in terms of output per unit of input.

Equity

The concept of fairness and justice in the distribution of wealth, opportunities, and privileges within a society.

Voice

The ability or opportunity for individuals or groups to express opinions and influence decisions that affect them.

ACFTU

The All-China Federation of Trade Unions (ACFTU) is the national trade union federation in the People's Republic of China, representing workers across various industries.