An increase in the real interest rate will cause an increase in ________.
A)saving
B)planned investment
C)net exports
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

An increase in the real interest rate will increase the return on saving, thus making saving relatively more attractive compared to spending. Therefore, people will save more in response to higher real interest rates.

An Increase in the Real Interest Rate Will Cause an Increase