If a Firm Can Borrow or Lend at a 6

question 181

Multiple Choice

If a firm can borrow or lend at a 6 percent annual interest rate, it will

• A)buy more capital if it has the funds on hand than if it has to borrow them
• B)ignore the market rate of interest when making capital investment decisions
• C)buy less capital if it has the funds on hand than if it has to borrow them
• D)ignore the market rate of interest when making saving decisions
• E)buy the same amount of capital whether it has the funds on hand or has to borrow them

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Definitions:

Positive

Characterized by the presence or possession of certain qualities, attributes, or outcomes, often implying optimism or constructive aspects.

Primary

First in order or development; fundamental to a process or system.

Secondary

Generally refers to the second in order, importance, or stage, often used in different contexts such as education or stages of a process.

Fixed-interval Schedule

A reinforcement schedule in which a reward is offered after a set period of time has passed, assuming a correct response is made.