Multiple Choice
The reason business investment is sensitive to interest rates is that
A) interest rates are a lagging indicator, so they signal to firms the state of the economy.
B) most funds used for investment are borrowed, so firms incur an interest charge.
C) interest rates indicate how aggressive government policy is about fighting recessions.
D) firms charge interest on any investment they make.
Correct Answer:
Verified
Correct Answer:
Verified
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