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A rise in interest rates can be associated with a decrease in investment, because: (a) businesses typically borrow in order to finance capital investment and

A rise in interest rates can be associated with a decrease in investment, because: (a) businesses typically borrow in order to finance capital investment and interest is a cost; (b) businesses will invest when the marginal product of capital over time at least covers their interest expenses; (c) both (a) and (b) above; (d) a weakening economy and business outlook typically precedes a rise in interest rates

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