Practice free →
Home › Bihar Board Class 12 (Arts) › Economics › Determination of Income and Employment › What happens to firms' investment as the interes…

What happens to firms' investment as the interest rate rises?

AIt rises sharply
BIt tends to fall
CIt remains unchanged
DIt doubles every year
Answer & Solution
Correct answer: B. It tends to fall
A higher interest rate raises the cost of investible funds, so firms tend to lower investment.
Solve this in the app — Bihar Board Class 12 (Arts) practice & 24k+ MCQs →
Related questions