Which of the following tends to cause business investment in plant and equipment to decline?
a. an increase in corporate profits
b. higher real interest rates
c. lower real interest rates
d. optimistic expectations
Answer: b. higher real interest rates
You might also like to view...
To restrict a firm's monopoly power, why can't antitrust authorities just set a floor or a ceiling in the market?
What will be an ideal response?
When the government budget deficit rises, national saving is reduced, interest rates rise, and investment falls
a. True b. False Indicate whether the statement is true or false
A continuous choice variable
A. can take on only special values between two end points. B. must be continuously varied to attain the goal. C. is in unconstrained but not constrained problems. D. all of the above E. none of the above
Goods that have spillover costs affect our collective well-being and therefore can be overproduced because
A. The government is concerned about broad economic welfare. B. The government has failed to enforce contract provisions. C. Most businesses are more concerned about profits than how the environment is affected. D. The government has failed to establish rules for contracts.