Recall Application 1, "Don't Forget the Costs of Time and Invested Funds," to answer the following questions.
-According to the application, if the interest rate rises, then the opportunity costs of running a business:
A) is unchanged.
B) falls.
C) rises.
D) cannot be determined with the information given.

Question

Quizplus · Accepted Answer

The opportunity costs of running a business would rise if the interest rate increases. This is because the cost of investing funds in the business would increase, making it more expensive to forgo other investment opportunities.