If the real interest rate increases,
A)the investment demand curve will shift to the right.
B)the investment demand curve will shift to the left.
C)there will be a movement upward along the investment demand curve.
D)there will be a movement downward along the investment demand curve.

Question

Quizplus · Accepted Answer

An increase in the real interest rate makes borrowing more expensive, leading to a decrease in the quantity of investment demanded, causing an upward movement along the investment demand curve.

If the Real Interest Rate Increases