1702EconomicsMedium
A profit maximising firm will invest up to the level of investment where?
AThe cost of borrowing equals the marginal efficiency of capital
BThe cost of borrowing is less then the marginal efficiency of capital
CThe cost of borrowing is greater than the marginal efficiency of capital
DThe cost of borrowing equals the marginal propensity to consume
Correct answer
B. The cost of borrowing is less then the marginal efficiency of capital
Explanation
The correct answer is The cost of borrowing is less then the marginal efficiency of capital.