Answer the Question on the Basis of the Following Information

question 211

Multiple Choice

Answer the question on the basis of the following information. Assume that if the interest rate that businesses must pay to borrow funds were 20 percent, it would be unprofitable for businesses to invest in new machinery and equipment, so investment would be zero. But if the interest rate were 16 percent, businesses would find it profitable to invest $10 billion. If the interest rate were 12 percent, $20 billion would be invested. Assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate. Refer to the information. Which of the following is an accurate verbal statement of the described relationship?

• A) There is no regular or dependable relationship between business investment and the interest rate.
• B) The amount of business investment is unaffected by changes in the interest rate.
• C) Investment spending by businesses varies inversely with the interest rate.
• D) Investment spending by businesses varies directly with the interest rate.

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Definitions:

Polygyny

A mating system in which a male animal mates with many females during a breeding season. Compare with polyandry.

Marsh Wren

A small North American bird that inhabits marshes and reed beds, known for its distinctive loud song and nest-building behavior.

Monogamy

A mating system in which a male animal mates with a single female during a breeding season.

Parental Care

Behaviours exhibited by parents towards their offspring to ensure their growth, survival, and success.