A higher nominal interest rate ________ the profit-maximizing level of MPK for firms,leading firms to a ________ capital-output ratio,thus ________ net investment.

Name: A higher nominal interest rate ________ the profit-maximizing level of MPK for firms,leading firms to a ________ capital-output ratio,thus ________ net investment.
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A higher nominal interest rate increases the cost of borrowing, which leads firms to seek a lower capital-output ratio to minimize costs, thereby lowering net investment.

A Higher Nominal Interest Rate ________ the Profit-Maximizing Level of MPK