Each of the Following Is a Reason Why the Appropriate

Multiple Choice

Each of the following is a reason why the appropriate interest rate in the investment function is the real, risky, long-term interest rate except

A) most investment projects are long-term.
B) investment projects are real assets: their value rises with inflation.
C) businesses borrowing to invest may go bankrupt.
D) the economy may go into a recession, thus reducing the expected profitability of the investment project.