Figure 4-4
-In figure above, if the interest rate falls from 10% to 7.5% and this causes businesses to become more optimistic about future investment conditions, we would observe that planned investment would
A) decrease from B to C to D.
B) increase from B to C to D.
C) increase from B to C to F.
D) decrease from B to C to F.

Question

Figure 4-4 
-In figure above, if the interest rate falls from 10% to 7.5% and this causes businesses to become more optimistic about future investment conditions, we would observe that planned investment would
A) decrease from B to C to D. 
B) increase from B to C to D. 
C) increase from B to C to F. 
D) decrease from B to C to F.

Quizplus · Accepted Answer

A fall in interest rates typically encourages more investment, and increased optimism about future conditions would further boost investment, leading to an increase from B to C to F.

Figure 4-4 -In Figure Above, If the Interest Rate Falls from 10