What Is the Impact on Nominal Interest Rates and Investment

question 47

Multiple Choice

What is the impact on nominal interest rates and investment spending when the money supply increases,other things being equal?

• A)nominal interest rates rise, and investment spending rises
• B)nominal interest rates fall, and investment spending rises
• C)nominal interest rates rise, and investment spending falls
• D)nominal interest rates fall, and investment spending falls

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Definitions:

Good

An item or service that satisfies human wants and provides utility, which can be transferred from one person to another.

Demand Curve

An illustrative chart that demonstrates the link between a product's price and the amount of it consumers want to buy.

Maximum Price

A price cap, often set by regulators, beyond which a product or service cannot be sold to prevent exploitation or ensure affordability.

Additional Unit

An extra item or quantity added to an existing lot or production level.