If the real interest rate falls, then the:
A) Investment schedule will shift upward
B) Investment schedule will shift downward
C) Point moves along the investment schedule to the right
D) Consumption schedule will shift downward

Question

Quizplus · Accepted Answer

A fall in the real interest rate makes investments more attractive, leading to an increase in investment spending. Therefore, the investment schedule will shift upward in response to a fall in the real interest rate.

If the Real Interest Rate Falls, Then The