Which of the Following Is a TRUE Statement Relative to Retained

question 327

Multiple Choice

Which of the following is a TRUE statement relative to retained earnings and investment?

• A) Lower interest rates stimulate borrowing for investment, but have no effect on the use of retained earnings for investment spending.
• B) Lower interest rates stimulate borrowing for investment, but discourage the use of retained earnings for investment.
• C) Lower interest rates reduce the opportunity cost of retained earnings, stimulating the use of these funds in investment.
• D) Lower interest rates have no effect on investment spending at all because investment spending is autonomous.

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Definitions:

Congress

The national legislative body of a country, particularly referring to the United States Congress, which is made up of the House of Representatives and the Senate.

Civil Disobedience

The act of not obeying specific laws or avoiding the payment of taxes and penalties as a non-violent method of expressing political dissent.

Legal Limits

The boundaries established by law, beyond which actions are deemed illegal or unauthorized.

Thoreau

Henry David Thoreau, an American essayist, poet, and philosopher known for his writings on natural history and philosophy, including "Walden."