As interest rates increase, present values __________, and firms will buy __________ capital goods.

Name: As interest rates increase, present values __________, and firms will buy __________ capital goods.
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As interest rates increase, the cost of borrowing money to invest in capital goods rises, leading to a decrease in the present value of future cash flows from those investments. Consequently, firms are likely to invest in fewer capital goods.

As Interest Rates Increase, Present Values __________, and Firms Will