The "No - Markets Fail Often" camp argues that an increase in savings
A) always causes savers and investors to be pessimistic about the future.
B) always causes interest rates to fall and increase business investment.
C) always causes interest rates to rise and decrease business investment.
D) might cause interest rates to rise and decrease business investment but only if savers and investors are optimistic about the future.
E) might cause interest rates to fall and increase business investment, but only if savers and investors stay optimistic about the future.

Question

Quizplus · Accepted Answer

An increase in savings can lead to lower interest rates, encouraging investment, but this effect depends on the optimism of savers and investors.

The "No - Markets Fail Often" Camp Argues That an Increase