A negative relationship exists between the level of investment spending and the interest rate.

Name: A negative relationship exists between the level of investment spending and the interest rate.
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Question

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A negative relationship exists because as interest rates increase, the cost of borrowing money for investment purposes also increases, leading to a decrease in investment spending. Conversely, when interest rates decrease, borrowing becomes cheaper, encouraging more investment spending.

A Negative Relationship Exists Between the Level of Investment Spending