Which of the following would lead domestic investment to rise?
A)a decline of government spending throughout the world
B)an increase in world taxes
C)a decrease in world autonomous consumption
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

A decrease in world autonomous consumption would lead to an increase in world saving, which would lead to a decrease in world interest rates. This would make it cheaper for domestic firms to borrow money to invest, which would lead to an increase in domestic investment.

Which of the Following Would Lead Domestic Investment to Rise