According to the classical economists,which of the following statements is false?
A) There is a direct relationship between the amount individuals save and the interest rate.
B) There is a direct relationship between the amount business firms invest and the interest rate.
C) As the interest rate rises,the quantity supplied of loanable funds rises.
D) Interest rate flexibility will ensure that saving is equal to investment.

Question

Quizplus · Accepted Answer

Classical economists believe that there is an inverse relationship between the amount business firms invest and the interest rate. As interest rates rise, the cost of borrowing increases, leading to a decrease in investment by businesses.

According to the Classical Economists,which of the Following Statements Is