Business investment spending would likely decrease following an increase in:
A) the interest rate.
B) profit expectations.
C) personal consumption expenditures.
D) all of the above.

Question

Quizplus · Accepted Answer

An increase in the interest rate makes borrowing more expensive for businesses, which can lead to a decrease in investment spending as the cost of financing new projects or expansions becomes higher. Increases in profit expectations or personal consumption expenditures would generally encourage more business investment, not less.

Business Investment Spending Would Likely Decrease Following an Increase In