Question

1. Suppose that Intel is considering building a new chip-making factory. Assuming that Intel needs to borrow money in the bond market, an increase in interest rates affects Intel’s decision about whether to build the factory, because now the cost of borrowing money becomes . a. True b. False2. If Intel has enough of its own funds to build the new factory without borrowing, an increase in interest rates still affects Intel’s decision about whether to build the factory. a. Trueb. False

Answer 1

Answer:

a. True

An increase in interest rate on bond will affect intel's decision, as the bonds, market provides firms an opportunity to borrow money.

If Intel has enough of its own funds to build the new factory without borrowing, an increase in interest rates still affects Intel’s decision about whether to build the factory

a. True

Even if Intel can raise it's own resources to build the new factory without borrowing, the increase in the rates of bond will still affects it's decision, as the increase in the rates of bond will make the market more attractive.

Explanation:

a. True

An increase in interest rate on bond will affect intel's decision, as the bonds, market provides firms an opportunity to borrow money.

If Intel has enough of its own funds to build the new factory without borrowing, an increase in interest rates still affects Intel’s decision about whether to build the factory

a. True

Even if Intel can raise it's own resources to build the new factory without borrowing, the increase in the rates of bond will still affects it's decision, as the increase in the rates of bond will make the market more attractive.