Asked by Jimmy Christiansen on Jun 16, 2024
Verified
The level of investment will tend to rise as the expected rate of profit is ____________ and the interest rate is __________.
A) high;high
B) high;low
C) low;low
D) low;high
Expected Rate of Profit
The anticipated return on investment, representing the gain or loss compared to the initial investment amount.
Interest Rate
The percentage of a sum of money charged for its use, typically expressed as an annual percentage.
- Discern the components that sway investment choices.
- Identify the impact of interest rates on the decision-making process for business investments.
Verified Answer
AP
Adriana Primo-VincentJun 18, 2024
Final Answer :
B
Explanation :
The level of investment tends to increase when the expected rate of profit is high because businesses are more likely to invest when they anticipate higher returns. Additionally, a low interest rate reduces the cost of borrowing, making investments more attractive.
Learning Objectives
- Discern the components that sway investment choices.
- Identify the impact of interest rates on the decision-making process for business investments.
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