Keynesian economist believe that there is a _____ relationship between savings and interest rates and a _______ relationship between investment and interest rates.

Question

Quizplus · Accepted Answer

Keynesian economists argue that there is a direct relationship between savings and interest rates (as interest rates increase, people are more incentivized to save) and an inverse relationship between investment and interest rates (as interest rates increase, borrowing costs for investment increase, thus reducing the amount of investment).

Keynesian Economist Believe That There Is a _____ Relationship Between