Which of the following concepts is most helpful in explaining why investment increases when the interest rate falls?
A)deadweight loss
B)present value
C)economic growth
D)financial intermediation

Question

Quizplus · Accepted Answer

When the interest rate falls, the present value of future returns on investment increases, making investment more attractive. Thus, the concept of present value is most helpful in explaining why investment increases when the interest rate falls.

Which of the Following Concepts Is Most Helpful in Explaining