You would expect the level of investment spending by businesses to increase if:
A) profit expectations decreased.
B) injections into the spending stream decreased.
C) the rate of interest on borrowed funds decreased.
D) the economy moved into the recession phase of the business cycle.

Question

Quizplus · Accepted Answer

A decrease in the rate of interest on borrowed funds makes borrowing cheaper for businesses, encouraging them to invest more in capital, projects, and expansion efforts due to lower financing costs.

You Would Expect the Level of Investment Spending by Businesses