There is a negative relationship between the quantity of investment spending and the interest rate.

Name: There is a negative relationship between the quantity of investment spending and the interest rate.
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Question

Quizplus · Accepted Answer

This is true because when the interest rate is high, it becomes more expensive for businesses to borrow money for investment, so they may choose to invest less. On the other hand, when interest rates are low, borrowing for investment becomes cheaper, so businesses may choose to invest more.

There Is a Negative Relationship Between the Quantity of Investment