Explain how a decrease in the interest rate will affect investment
The interest rate is the cost of borrowing investment funds. When the interest rate decreases, then the cost of borrowing falls, and so firms find it profitable to undertake additional investments. Therefore, we find an inverse relationship between the interest rate and investment spending.
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Who serves as voting members of the Federal Open Market Committee (FOMC)?
What will be an ideal response?
If a country's exports are worth $5 billion and its imports are worth $3.9 billion, the country experiences a ________
A) trade surplus B) budget deficit C) trade deficit D) budget surplus
Define the following terms. Give a complete and precise definition in one sentence. a. total utility b. marginal utility c. consumer’s surplus d. “law” of demand
What will be an ideal response?
What does the phrase "internalizing an external cost" mean?
A) forcing producers to factor into their production costs the cost of the externalities created in the production of their output B) finding a way to address cross-border pollution C) limiting the extent to which domestic firms can outsource production D) prohibiting economic activities that create externalities