Other Things Equal, If the Real Interest Rate Falls and Business

question 220

Multiple Choice

Other things equal, if the real interest rate falls and business taxes rise,

• A) investment will rise until it is equal to saving.
• B) we will be uncertain as to the resulting change in investment.
• C) we can be certain that investment will rise.
• D) we can be certain that investment will fall.

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Definitions:

Sensory Reactions

The responses or changes in the body resulting from stimulation of the sensory organs, such as sight, hearing, taste, touch, and smell.

Research

The systematic investigation into and study of materials and sources in order to establish facts and reach new conclusions.

Association

The connection or linkage between two ideas, concepts, or mental states, often formed through experience or learning.

Psychological Science

The study of mind, brain, and behavior through the systematic observation and experimentation.