High interest rates make a firm's long-term investment in new capital
a. riskless.
b. less attractive.
c. more attractive.
d. no more attractive than short-term investment.
b
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Last year in the United States, the price of snowboards rose by 5 percent and the price rise resulted in a 15 percent increase in the quantity supplied. This outcome is an indication that
A) the supply curve of snowboards shifted rightward. B) the supply of snowboards is price elastic. C) some firms entered into the snowboard industry. D) All of the above answers are correct.
Assume that a lawyer and a secretary have been working together for two years. The lawyer suddenly realizes that he prepares legal briefs and types faster than the secretary. Upon learning this he decides to let his secretary go
Why might this be a mistake?
A ceiling on interest rates is likely to lead to
A. an increase in lending activity. B. more rapid capital formation by business. C. increases in hiring of labor. D. a shortage of loanable funds.
The Board of Governors of the Fed performs each of the following functions, except:
A. approving bank merger applications. B. analyzing financial and economic conditions. C. setting the reserve requirement. D. making discount loans.