When the interest rate is ________,________ investments in physical capital will earn more than the cost of borrowed funds,so planned investment spending is ________.
A)high;few;high
B)high;few;low
C)low;few;high
D)low;many;low
E)high;many;high

Question

Quizplus · Accepted Answer

When the interest rate is high, fewer investments in physical capital will earn more than the cost of borrowed funds, so planned investment spending is low. High interest rates increase the cost of borrowing, which reduces the number of profitable investments.

When the Interest Rate Is ________,________ Investments in Physical Capital

When the Interest Rate Is , Investments in Physical Capital