What is an increase in interest rates likely to result in?
A)an increase in investment spending
B)a decrease in investment spending
C)an increase in consumption spending
D)no change in either consumption or investment spending

Question

Quizplus · Accepted Answer

An increase in interest rates will make borrowing more expensive, which will decrease investment spending. This is because businesses will be less likely to take out loans and invest in new projects when borrowing is more expensive.

What Is an Increase in Interest Rates Likely to Result