A rise in interest rates will cause
A)A decline in investment spending.
B)A rise in investment spending.
C)Investment spending to remain constant.
D)Investment spending to be eliminated from the economy.

Question

Quizplus · Accepted Answer

When interest rates rise, the cost of borrowing money increases, leading to higher costs for businesses and individuals looking to invest. This decreased affordability leads to a decline in investment spending as businesses and individuals are less likely to take on additional debt or make new investments.

A Rise in Interest Rates Will Cause