If the Real Interest Rate Is Less Than the Marginal

question 128

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) using more imported intermediate goods.

---

Definitions:

PGAL

Phosphoglyceraldehyde, a three-carbon molecule formed in the Calvin cycle of photosynthesis and glycolysis.

ATP

Adenosine triphosphate, a high-energy molecule that stores and transfers energy within cells, crucial for many cellular processes.

NADPH

Nicotinamide adenine dinucleotide phosphate, a coenzyme involved in redox reactions, playing a crucial role in photosynthesis and anabolic pathways.

Photosynthesis

The process by which green plants, algae, and some bacteria convert light energy into chemical energy stored in glucose, using carbon dioxide and releasing oxygen.