The simple investment function shows that investment ______ as ______ increases.
A) decreases; the interest rate
B) increases; the interest rate
C) decreases; government spending
D) increases; government spending

Question

Quizplus · Accepted Answer

The simple investment function typically posits that investment decreases as the interest rate increases, because higher interest rates make borrowing more expensive, thereby reducing the amount of investment undertaken by businesses.

The Simple Investment Function Shows That Investment ______ as ______

The Simple Investment Function Shows That Investment as