Multiple Choice
The neoclassical model of investment says investment depends negatively on the real interest rate because an increase in the real interest rate:
A) raises the cost of capital.
B) lowers the marginal product of capital.
C) lowers the real rental price of capital.
D) slows down the speed at which net investment responds to the incentive to invest.
Correct Answer:
Verified
Correct Answer:
Verified
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