If the Real Interest Rate in the Economy Is I

question 13

Multiple Choice

If the real interest rate in the economy is i and the expected rate of return from 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.

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