Question

Whichof the following are likely to reduce investment expenditure?

A Lower initial capital outlays on projects Correct Answer Incorrect Answer
B A rise in the rate of interest Correct Answer Incorrect Answer
C A fall in the rate of interest Correct Answer Incorrect Answer
D More favourable business expectations and less uncertainty Correct Answer Incorrect Answer
E None of these Correct Answer Incorrect Answer

Solution

A rise in the rate of interest reduces investment expenditure because it becomes more costly to invest.

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