An increase in interest rates will generally lead to a(n) ____ in present investment and a(n) ____ in future income and production.

Question

Quizplus · Accepted Answer

An increase in interest rates will make present investment more expensive, leading to a decrease in present investment. Additionally, the cost of borrowing money will increase, leading to a decrease in future income and production. Therefore, the best choice is A) decrease, decrease.

An Increase in Interest Rates Will Generally Lead to A(n)