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Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406

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BuyFindarrow_forward

Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406
Textbook Problem

“As the interest rate falls, firms are more inclined to buy capital goods.” Do you agree or disagree? Explain your answer.

To determine

Identify the effect of fall in the interest rate on the purchase of capital goods.

Explanation

Generally, the interest rates and the investments are inversely related. The reason is that a decline in the interest rate will increase the present value of the potential investment...

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