A fall in the real interest rate,all other things held constant,will cause a country's to .
A)terms of trade; improve
B)terms of trade; worsen
C)current consumption: increase
D)welfare level; improve
E)current consumption: decrease

Question

Quizplus · Accepted Answer

A fall in the real interest rate makes borrowing cheaper, encouraging current consumption to increase as people are more likely to spend rather than save.

A Fall in the Real Interest Rate,all Other Things Held