If SA citizens become less concerned with the future and save less at each real interest rate, real interest rates
A)rise and investment falls.
B)rise and investment rises.
C)fall and investment rises.
D)fall and investment falls.

Question

Quizplus · Accepted Answer

When citizens save less, the supply of loanable funds decreases, leading to higher real interest rates. Higher interest rates typically discourage investment, causing it to fall.

If SA Citizens Become Less Concerned with the Future and Save