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.

---

Definitions:

Attraction

The force that causes one object to pull another object to itself.

Repulsion

The force that causes one object to push another object away from itself.

Smallest Part

The component or piece within a system or mechanism that is the least in size, volume, or quantity.

Element

(1) One of the basic building blocks of nature. An atom is the smallest part of an element; (2) One part of a group of devices.