When Investment Is Financed Through Borrowing,an Increase in the Interest

When investment is financed through borrowing,an increase in the interest rate will lead to:

A) a fall in investment as the supply of funds declines at higher interest rates.
B) a fall in investment as the rate of return on certain projects will be below the interest rate.
C) an increase in investment as the value of present spending will be higher.
D) an increase in investment as the net marginal productivity will increase.

Correct Answer:

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