If the real interest rate in the economy is i and the expected rate of return on additional investment is r, then other things equal:
A)more investment will be forthcoming when i exceeds r.
B)less investment will be forthcoming when r rises.
C)r will fall as more investment is undertaken.
D)r will exceed i at all possible levels of investment.
Answer:C
If the real interest rate in the economy is i and the expected rate of return on additional investment is r, then other things equal:
A)more investment will be forthcoming when i exceeds r. B)less investment will be forthcoming when r rises. C)r will fall as more investment is undertaken. D)r will exceed i at all possible levels of investment.