A decrease in the real interest rate will

Name: A decrease in the real interest rate will
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A decrease in the real interest rate makes borrowing cheaper, which leads to increased consumption and investment as people are more willing to spend and borrow. This is because the cost of borrowing is lower, and people can afford to purchase more goods and services. Therefore, the correct choice is D as it is the only option that describes an increase in both consumption and investment.

A Decrease in the Real Interest Rate Will