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Question
Which of the following is a true statement relative to retained earnings and investment?
A) Lower interest rates stimulate borrowing for investment, but have no effect on the use of retained earnings for investment spending.
B) Lower interest rates stimulate borrowing for investment, but discourage the use of retained earnings for investment.
C) Lower interest rates reduce the opportunity cost of retained earnings, stimulating the use of these funds in investment.
D) Lower interest rates have no effect on investment spending at all because investment spending is autonomous.
Answer
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Related questions
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