As the interest rate falls, firms are more inclined to buy capital goods because the

Name: As the interest rate falls, firms are more inclined to buy capital goods because the
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When interest rates fall, the cost of borrowing money to invest in capital goods decreases. This makes future returns from these investments more valuable in present terms, hence the present value of the stream of returns increases. This is because the discount rate used to calculate the present value of future returns is lower.

As the Interest Rate Falls, Firms Are More Inclined to Buy