The Rate of Interest Is an Important Determinant of Investment

Multiple Choice

The rate of interest is an important determinant of investment spending,even if a firm does not need to borrow funds.Why is this?

A) Because the lower the rate of interest,the higher will be the opportunity cost of investment.
B) Because instead of investing,the firm always has the choice of putting its funds in a savings account which will pay a return.
C) Because investment is usually more profitable than saving.
D) Because the higher the rate of interest,the lower inflation rate.