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Firms Often Seek to Borrow Money to Expand Their Capital

Question 190

Multiple Choice

Firms often seek to borrow money to expand their capital stock, and the price they pay for that money is the interest rate.What happens to the supply of money (to lend) if the interest rate increases?


A) It increases.
B) It decreases.
C) It does not change.
D) It depends entirely on the interest rate.

Correct Answer:

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