The effect of a higher discount rate could best be represented by,ceteris paribus,
A)An upward shift of the investment demand curve.
B)A downward shift of the investment demand curve.
C)A movement up the investment demand curve.
D)A movement down the investment curve.

Question

Quizplus · Accepted Answer

A higher discount rate increases the cost of borrowing, leading to a decrease in investment, which is represented by a movement up along the investment demand curve as the quantity of investment demanded decreases at higher interest rates.

The Effect of a Higher Discount Rate Could Best Be