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When the Rate of Interest (Or Price of Capital) Increases

Question 42

Multiple Choice

When the rate of interest (or price of capital) increases, the


A) quantity demanded of loanable funds by the firm will decrease
B) quantity demanded of loanable funds by the firm will increase
C) firm's MRP of capital increases
D) firm's MPP of capital increases
E) firm's MRP of capital decreases

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