economy is experiencing higher real interest rates, business firms will most likely be discouraged from investing...

economy is experiencing higher real interest rates, business firms will most likely be discouraged from investing in: stocks

bonds

mutual funds

capital

Expert Solution

If economy is experience a higher real interest rate it will give less return from the investing in the the assets like government Bond ,deposits .

Since they will not generate return and it will impact them the most

Stock ,mutual fund all are related from the equity market which is is not dependent on the real interest rate

They all are parts of share market which is totally Independent and work on market sentiments

So the correct answer here is bonds

Rahul Sunny answered 2 years ago

When an economy is experiencing higher real interest rates, wewould expect aggregate demand to ______________...

When an economy is experiencing higher real interest rates, we would expect aggregate demand to ______________ and unemployment to _____________.shift to the left; riseshift to the left, fallshift to the right; risenot move; not changeIf investment spending increases, then according to the Keynesian model:the aggregate demand shifts right.the short run aggregate supply curve shifts right.the aggregate demand curve shifts left.the short run aggregate demand curve shifts left.

Suppose firms expect future output to be higher and future interest rates to be higher. Given...

Suppose firms expect future output to be higher and future interest rates to be higher. Given this information, how will firms alter investment in the current period? Explain.

A fall in interest rates is most likely to decrease the interest rate risk of a...

A fall in interest rates is most likely to decrease the interest rate risk of a ______. A. support tranche B. Z-tranche C. PAC tranche

The economy of Lower Slobovia is currently experiencing an interest rate of 12% and a real...

The economy of Lower Slobovia is currently experiencing an interest rate of 12% and a real GDP of 5,000. The level of aggregate demand puts in the Keynesian range of the country's aggregate supply curve and perfectly elastic range of the country's labor supply curve. Suppose the government has announced its intent to achieve a target interest rates of 6% and a real GDP level of $10,000. Further assume this action still leave the economy in the perfectly elastic ranges...

a. In a small open economy, the domestic real interest rate can be higher than the...

a. In a small open economy, the domestic real interest rate can be higher than the world real interest rate. Answer true, false, or uncertain. Please briefly explain your answer. b.Consider a country that is initially in steady state. According to the Solow–Swan model, if the technology parameter A increases but the saving rate falls, then the per capita capital stock increases and the country moves to a new, higher steady state level of per capita income. Answer true, false,...

Explain whether the following make collusion more or less likely and why. a) Higher interest rates...

Explain whether the following make collusion more or less likely and why. a) Higher interest rates b) Less frequent interaction between competitors c) Growing profits in the industry d) A firm on the verge of bankruptcy e) A new competitor entering the market

Warning: Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to...

Warning: Rounding in the calculation of monthly interest rates is discouraged. Such rounding can lead to answers different from those presented here. For long-term loans, the differences may be pronounced. Use the Estimation Rule for Short-Term Loans to estimate the monthly payment on a loan of $4500 borrowed over a two-year period. (Round your answer to the nearest cent.) The monthly payment is at least...? The rate wasnt given in the problem

Which of the following statements regarding bond prices and market interest rates are most likely to...

Which of the following statements regarding bond prices and market interest rates are most likely to be true? 1. Interest rate risk can be described as the changes in market interest rates that will cause fluctuations in a bond’s price. 2. Bond prices and market interest rates are negatively related to each other. 3. Coupon paying bonds will trade at a premium to their face value because of the future cash flows expected by bond investors.

Investors who believe that interest rates will rise most likely prefer to invest in: A) inverse...

Investors who believe that interest rates will rise most likely prefer to invest in: A) inverse floaters B) fixed-rate bonds C) floating-rate notes.

Which of the following events would most likely explain a general increase in interest rates and...

Which of the following events would most likely explain a general increase in interest rates and a decrease in private investment in the loanable funds model, ceteris paribus? A. The U.S. federal government generates a surplus of $1 trillion and uses it to pay down the national debt. B. The U.S. federal government budget goes from deficit to surplus. C. The U.S. federal government reduces the tax rate on savings. D. The U.S. federal government budget deficit increases. _______________________________________________________________________________________________________________________________________________ 2....

Question