Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s).
-According to the Application,if the interest rate rises,then the opportunity costs of running a business
A) rises.
B) falls.
C) is unchanged.
D) cannot be determined with the information given.

Question

Quizplus · Accepted Answer

If the interest rate rises, borrowing money becomes more expensive, and the cost of capital increases. As a result, the opportunity cost of running a business also increases, as the business has to spend more money on financing costs rather than investing it in other profitable uses.

Recall the Application About Running a Lawn-Cutting Business Using Solar-Powered