If the Real Interest Rate Is Less Than the Marginal

question 45

Multiple Choice

If the real interest rate is less than the marginal product of capital,firms are better off:

• A)producing at a loss.
• B)saving their earnings in an economywide financial market.
• C)accumulating more inventory.
• D)borrowing in financial markets and buying more capital.
• E)none of the above

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Definitions:

Deconstructionism

A philosophy that argues reality does not exist apart from human perceptions, or constructions, of it.

Existentialism

A philosophical theory or approach that emphasizes individual freedom, choice, and responsibility, asserting the creation of one's values and meaning in life.

Empiricism

The idea that everything a person knows comes from experience.

Naturalism

A philosophical viewpoint that everything arises from natural properties and causes, and supernatural explanations are excluded or discounted.