Which of the following is a TRUE statement relative to retained earnings and investment?
A. Lower interest rates stimulate borrowing for investment, but have no effect on the use of retained earnings for investment spending.
B. Lower interest rates stimulate borrowing for investment, but discourage the use of retained earnings for investment.
C. Lower interest rates have no effect on investment spending at all because investment spending is autonomous.
D. Lower interest rates reduce the opportunity cost of retained earnings, stimulating the use of these funds in investment.
Answer: D
You might also like to view...
Two countries engaged in trade in products with no scale economies, produced under conditions of perfect competition, are likely to be engaged in
A) inter-industry trade. B) monopolistic competition. C) intra-industry trade. D) Heckscher-Ohlin trade. E) oligopolistic competition
If workers do not believe that policymakers are serious about fighting inflation, they are most likely to push for higher wages, which will ________ aggregate ________ and lead to unemployment or inflation or both, everything else held constant
A) decrease; demand B) increase; demand C) decrease; supply D) increase; supply
Which of the following is likely to cause market failure and be undersupplied?
A. River water B. Research C. Orange juice D. Grazing pasture
Point elasticity is a measure of elasticity that uses slope measurement.
Answer the following statement true (T) or false (F)