Answer the Question on the Basis of the Following Information

question 5

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 correctly expresses the indicated relationship as an equation?

• A) i = 20 - 4I.
• B) i = 20 - .4I.
• C) i = 24 - .4I.
• D) i = 20 - 10I.

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Definitions:

Quantitative Change

Quantitative change refers to changes in amount or quantity, often measurable, such as height, weight, or volume, as opposed to qualitative changes which involve the nature or type of something.

Centration

A cognitive inability in early childhood to focus on more than one aspect of a situation simultaneously.

Nature Versus Nurture

A theoretical debate concerning whether human behavior is determined more by genetic or hereditary factors (nature) or by environment and learning (nurture).

Operant Conditioning

An educational method where behavior intensity is adjusted by using rewards or penalties.