a. The major economic functions of the interest rate are O to influence investment and domestic output and to provide market incentives for saving. to provide market incentives for saving and to allocate money capital to its most productive uses. to provide market incentives for saving and to encourage international capital flows. O to influence investment and domestic output and to allocate money capital to its most productive uses. b. Many businesses finance their investment activities internally. Should internal financing affect the efficiency with which the interest rate performs its functions? No, investment is profitable if the expected rate of return is greater than the rate of interest regardless of the source of funds. O No, because internal financing relies on a different profit calculation. Yes, investment is profitable if the expected rate of return is greater than the rate of interest regardless of the source of funds. O Yes, because firms are usually more anxious about what happens to money that