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:

GEO

An abbreviation for Geostationary Orbit, a circular orbit 35,786 kilometers above the Earth's equator and following the direction of the Earth's rotation.

LEO

Low Earth Orbit, a satellite system orbiting relatively close to Earth, often used for telecommunications, military, and observation purposes.

Footprint

In a technological context, the term often refers to the amount of space occupied by a device, or the environmental impact of producing and disposing of it.

GEO

A Geostationary Earth Orbit is a circular path located 35,786 kilometers directly above the Earth's equator, moving in the same direction as the Earth rotates.