If business taxes are reduced and the real interest rate increases:
A)consumption and saving will necessarily increase.
B)the level of investment spending might either increase or decrease.
C)the level of investment spending will necessarily increase.
D)the level of investment spending will necessarily decrease.
Answer:B
If business taxes are reduced and the real interest rate increases:
A)consumption and saving will necessarily increase. B)the level of investment spending might either increase or decrease. C)the level of investment spending will necessarily increase. D)the level of investment spending will necessarily decrease.