Each of the following is a reason why the appropriate interest rate in the investment function is the real, risky, long-term interest rate except
A) most investment projects are long-term.
B) investment projects are real assets: their value rises with inflation.
C) businesses borrowing to invest may go bankrupt.
D) the economy may go into a recession, thus reducing the expected profitability of the investment project.
Correct Answer:
Verified
Q11: The increase in the interest rate that
Q12: An inverted term structure occurs
A) when the
Q13: Each of the following is a reason
Q14: The riskier that lenders believe a loan
Q15: The premium that lenders charge for loans
Q17: The intercept of the investment function
A) tells
Q18: The slope of the investment function
A) tells
Q19: Each of the following is a reason
Q20: In general, the higher is the stock
Q21: The level of exports is affected by
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