A news headline states that "Lower interest rates mean higher investment." Which of the following statements identifies a reason that this headline could be misleading?
A) It takes higher interest rates to create an incentive for higher levels of investment.
B) Interest rates have no impact on the amount of funds that are borrowed for investment.
C) If lower interest rates stem from an increase in demand for investment funds, the amount of investment will fall due to competition for the funds.
D) If lower interest rates stem from a reduction in the demand for investment funds, the amount of investment may be falling.
Correct Answer:
Verified
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