Assume That for the Entire Business Sector of a Private

Assume that for the entire business sector of a private closed economy, there are $0 worth of investment projects that will yield an expected rate of return of 25 percent or more. But there are $15
Worth of investments that will yield an expected rate of return of 20-25 percent, another $15 with an
Expected rate of return of 15-20 percent, and an additional $15 of investment projects in each
Successive rate of return range down to and including the 0-5 percent range. If the real interest rate is
15 percent, what amount of investment will be undertaken?

A) $15
B) $30
C) $45
D) $60

Correct Answer:

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