Government policies that encourage savings
A) reduce interest rates.
B) increase interest rates.
C) have no effect on interest rates.
D) lower the net present value of all investments.
Question 2
Investment demand is downward sloping because as the interest rate decreases,
A) each project's internal rate of return decreases.
B) each project's internal rate of return increases.
C) more projects will have an internal rate of return that exceeds the interest rate.
D) more projects will have an internal rate of return that is less than the interest rate.
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