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And economic activity can be defined as the total level of output of goods and services over a period of time (Dixon & O’Mahony, 2004). There are many factors determining the level of investment and increasing in business spending can increase the level of economic activity.
Interest Rates
A change in interest rates is the most important factor influence business investment. Interest rates refers to the cost of borrowing to purchases fund for business investment (Dixon & O’Mahony, 2004), therefore a decrease in interest rates result in the lower cost of borrowing funds, so that business can invest more in new capital equipment...
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