The investment demand slopes downward and to the right because lower real interest rates
A)expand consumer borrowing, making investments more profitable.
B)boost expected rates of returns on investment.
C)enable more investment projects to be undertaken profitably.
D)create tax incentives to invest.

Question

Quizplus · Accepted Answer

Lower real interest rates reduce the cost of borrowing, making it cheaper for firms to finance investment projects, thus enabling more projects to be undertaken profitably.

The Investment Demand Slopes Downward and to the Right Because