Which of the Following Would Increase the Level of Planned

question 200

Multiple Choice

Which of the following would increase the level of planned real investment?

• A) An increase in the interest rate
• B) An expectation of higher future profits
• C) An expectation of higher future costs
• D) An increase in business taxes

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Definitions:

Effective Rate

The actual interest rate an investor receives after the effects of compounding interest are taken into account.

Compounding Interval

The period of time at the end of which interest is added to the principal balance of an investment or loan.

Interest

The charge for borrowing money or the return on invested capital, generally expressed as a percentage rate.

Furniture

Movable objects intended to support various human activities such as seating, eating, and sleeping, as well as to hold objects or store items.