A dairy obtains a loan from a commercial bank to install a bottling line.
Which explanation best describes how the loan supports the dairy's investment?
The loan adds to the dairy's sales revenue, which then pays for the bottling line
The bank can lend savings deposited by households to fund the firm's spending on capital
The bank pays the dairy interest on the loan, adding to the funds available for equipment
Taking out the loan is itself the investment, whether or not the bottling line is installed
82 exam-style questions on OCR GCSE Economics 2.8 The role of money and financial markets, covering 2.8.1 Money as a medium of exchange, 2.8.2 Role of the financial sector, 2.8.3 Importance of the financial sector, 2.8.4 Interest rates and saving, borrowing, investment, and 2.8.5 Effect of interest rate changes. Each one has a worked solution and a mark scheme showing where the marks go.