Question

According to the theory of investment, when the real interest rate increases, business fixed investment ______ because the ______ of capital increases. increases; cost decreases; marginal product decreases; cost increases; marginal product

Answer 1

the answer is increases; cost

Step-by-step explanation:

the theory of investment say that as the cost of capital, or the cost of financing the business operations and activities increase, the level of investment by businesses decrease as the companies find it more difficult to generate profits!