As the rate of interest on borrowed funds increases, the quantity of investment funds demanded diminishes.

Name: As the rate of interest on borrowed funds increases, the quantity of investment funds demanded diminishes.
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Quizplus · Accepted Answer

This is because higher interest rates increase the cost of borrowing, making it more expensive for businesses and individuals to invest in projects or buy goods using borrowed funds. This, in turn, decreases the demand for investment funds.

As the Rate of Interest on Borrowed Funds Increases, the Quantity