Fewer of an economy's resources will be channeled into building new factories and equipment when _____
A) interest rates are high.
B) households decide to spend 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, causing firms to reduce investment in new factories and equipment.

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