Ask Question
BusinessBusiness
21 May, 15:10

Other things equal, an increase in the interest rate leads to: a. no change in the quantity of investment goods demanded. b. sometimes an increase and sometimes a decrease in the quantity of investment goods demanded. c. an increase in the quantity of investment goods demanded. d. a decrease in the quantity of investment goods demanded.

+2
Answers (1)
  1. 21 May, 15:23
    0
    Option (d) is correct.

    Explanation:

    Other factors remains constant, an increase in the interest rate will lead to reduce the quantity demanded for investment goods because of the higher rate of borrowings.

    Higher interest rate induces the borrowers to take less loans. Hence, they have less amount of money in hand to invest in the investment goods. Therefore, this will reduce the demand for investment goods. Also, we can say that the cost of borrowing increases as a result of higher interest rate.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Other things equal, an increase in the interest rate leads to: a. no change in the quantity of investment goods demanded. b. sometimes an ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Zero-coupon bonds: Offer a return in the form of a deep discount off the face value. Are reported as shareholders' equity by the issuer. Result in zero interest revenue for the investor. Result in zero interest expense for the issuer.
Answers (1)
For purposes of assessing income taxes, there are three official income levels for workers in a small country: high, medium, and low.
Answers (1)
6. Concerned about the crowding-out effects of government borrowing on private investment spending, a candidate for president argues that the United States should just print money to cover the government's budget deficit.
Answers (1)
If the government wants to reduce GDP by $500 million, the most appropriate action is: contractionary fiscal policy, which includes a reduction in government spending by $500 million.
Answers (1)
Economies organize according to the principle of specialization and exchange because doing so A. enables the government to exercise greater control than would otherwise be possible B. forces people to work longer hours than they would do normally C.
Answers (1)
New Questions in Business
Fixed expenses: a. includes labor, raw materials, and commissions. b. can be estimated by taking into consideration the production. c. are incurred regardless of sales volume. d. must be linked to strategy in the business plan
Answers (1)
4) Which of the following is least likely to be your primary health care provider? a. an allergist b. an internist c. an obstetrician-gynecologist
Answers (1)
T/F A macroeconomist would be concerned with the following statement. "Two major hurricanes caused significant damage to the eastern seaboard and led to a fall in GDP and a rise in unemployment in the U. S. economy."
Answers (1)
At the beginning of the year, Mitchum Enterprises allows for estimated uncollectible accounts of $14,000. By the end ofthe year, actual bad debts total $15,000. Record the write-off to uncollectible accounts.
Answers (1)
Landor Appliance Corporation makes and sells electric fans. Each fan regularly sells for $40. The following cost data per fan is based on a full capacity of 155,000 fans produced each period.
Answers (1)
Home » Business » Other things equal, an increase in the interest rate leads to: a. no change in the quantity of investment goods demanded. b. sometimes an increase and sometimes a decrease in the quantity of investment goods demanded. c.
Sign Up Forgot Password?