The decline in real interest rates A. causes an increase in actual investment due to an increase

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The decline in real interest rates

A. causes an increase in actual investment due to an increase in the cost of loans

B. decreases the cost of borrowing which in turn increases investment spending

C. decreases marginal propensity to invest and therefore causes a decrease in planned investment

D. does not affect investment because most of the firms use their own funds to finance investment spending

Related Book For answer-question

Economics of Money, Banking and Financial Markets

ISBN: 978-0321598905

9th Edition

Authors: Frederic S. Mishkin

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Posted Date: Jan 06, 2021 06:19 PM

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The decline in real interest rates A. causes an increase in actual investment due to an increase

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Answer B decreases the cost of borrowing which in turn increases investment spending Explanation Th... View the full answer

Economics of Money, Banking and Financial Markets

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