A manufacturer's expected return from a new machine is 5% a year. The interest rate on the loan needed to buy it rises from 4% to 6%, so the firm cancels the purchase. Which pair of effects is most likely?
Current investment decreases and future productive capacity grows more quickly
Current investment decreases and future productive capacity grows more slowly
Current investment increases and future productive capacity grows more quickly
Current investment increases and future productive capacity grows more slowly
75 exam-style questions on AQA GCSE Economics 2.1 Introduction to the national economy, covering 2.1.1a What an interest rate is, 2.1.1b Interest rates and consumer decisions, 2.1.1c Interest rates, producer decisions and calculations, 2.1.2a UK government revenue and spending, and 2.1.2b Direct, indirect and progressive taxation. Each one has a worked solution and a mark scheme showing where the marks go.