Multiple Choice
According to the neoclassical model of investment, the immediate impact of a rise in the real interest rate will be to:
A) increase the cost of capital, the rental price of capital, and the rate of investment.
B) increase the cost of capital and the rental price of capital, but to lower the rate of investment.
C) increase the rental price of capital and the rate of investment, but to leave the cost of capital unchanged.
D) increase the cost of capital and lower the rate of investment, but to leave the rental price of capital
Correct Answer:
Verified
Correct Answer:
Verified
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