A Reduction in Real Interest Rates Will Cause the Demand

question 41

Multiple Choice

A reduction in real interest rates will cause the demand for new homes to

• A)increase, which results in an increase in investment expenditures.
• B)increase, which results in an increase in consumption expenditures.
• C)decrease, which results in a decrease in investment expenditures.
• D)decrease, which results in a decrease in consumption expenditures.
• E)increase, which will result in an increase in business fixed investment.