Less of an economy's resources will be channeled into building new factories and equipment when:
A)interest rates are high.
B)households decide to save more of their income.
C)firms are optimistic about their future profits.
D)aggregate income increases.
E)an economy has a trade deficit.

Question

Quizplus · Accepted Answer

High interest rates make borrowing more expensive, which can deter investment in new factories and equipment as the cost of financing these investments increases.

Less of an Economy's Resources Will Be Channeled into Building