A decrease in the market interest rate will _____
A) increase investment for individual firms, so total investment in the economy increases.
B) increase investment for individual firms, so total investment in the economy decreases.
C) decrease investment for individual firms, so total investment in the economy increases.
D) decrease investment for individual firms, so total investment in the economy is decreases.
E) not change investment for individual firms, so total investment in the economy is unchanged.

Question

Quizplus · Accepted Answer

A decrease in the market interest rate will make it cheaper for firms to borrow money and invest in new projects, leading to an increase in investment for individual firms. This will likely result in an overall increase in total investment in the economy.

A Decrease in the Market Interest Rate Will _____