Higher interest rates increase the opportunity cost of using funds for investment.

Name: Higher interest rates increase the opportunity cost of using funds for investment.
Brand: Quizplus
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Question

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When interest rates are high, the cost of borrowing money to invest also increases. This means that the opportunity cost of using your available funds for investment also increases, as the potential return on the investment may not be worth the higher interest expense.

Higher Interest Rates Increase the Opportunity Cost of Using Funds