If the Real Interest Rate in the Economy Is I

question 65

Multiple Choice

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.

---

Definitions:

Somatic Nervous System

Part of the peripheral nervous system that handles voluntary control of body movements via skeletal muscles.

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, responsible for processing and sending out information to and from all parts of the body.

Sympathetic Nervous System

Part of the autonomic nervous system that prepares the body for fight or flight responses by increasing heart rate, dilating pupils, and other physiological changes.

Endocrine System

A network of glands in the body that secrete hormones directly into the bloodstream to regulate bodily functions.