Which interest rate is the most important for investment decisions by firms?

Question

Quizplus · Accepted Answer

The real interest rate is adjusted for inflation, which is important for firms when making investment decisions since they need to consider the purchasing power of the funds they are borrowing or investing. The nominal interest rate does not take inflation into account, while the Treasury bill rate and long-term nominal rate may not accurately reflect the true cost of borrowing when inflation is present.

Which Interest Rate Is the Most Important for Investment Decisions