The Demand Curve for Funds Is Downward Sloping Because

question 196

Multiple Choice

The demand curve for funds is downward sloping because

• A)the value of the MRP in terms of today's money shrinks as the interest rate rises.
• B)future returns must be discounted more when the interest rate rises.
• C)as the interest rate rises, more and more investments become unprofitable.
• D)All of the above are correct.

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