When Investment Is Financed Through Borrowing,an Increase in the Interest

question 6

Multiple Choice

When investment is financed through borrowing,an increase in the interest rate will lead to:

• A)a fall in investment as the supply of funds declines at higher interest rates.
• B)a fall in investment as the rate of return on certain projects will be below the interest rate.
• C)an increase in investment as the value of present spending will be higher.
• D)an increase in investment as the net marginal productivity will increase.

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Definitions:

Amniocentesis

A medical procedure used in prenatal diagnosis to extract amniotic fluid using a needle for genetic and chromosomal testing.

Fetal Abnormalities

Conditions that deviate from the normal development of a fetus, which can be structural, functional, or genetic.

Development

The process of growth or improvement over time, often used in context of countries, individuals, or technologies.

Low-Birth-Weight Infant

A term describing babies born with a weight of less than 2500 grams (5 pounds, 8 ounces), often due to premature birth or nutritional issues during pregnancy.