A Lower Real Interest Rate ________ Investment Spending and ________

question 53

Multiple Choice

A lower real interest rate ________ investment spending and ________ consumption spending.

• A)increases; increases
• B)increases; decreases
• C)decreases; decreases
• D)decreases; increases

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Definitions:

Normal Good

A good for which demand increases when consumer income rises, and falls when consumer income decreases, all else being equal.

Income Increased

A situation where an individual or entity experiences a rise in their earnings or revenue.

Two-Liter Coke Bottles

A specific size of Coca-Cola bottle that contains two liters of the soft drink.

Revenue

Revenue refers to the total income generated from the sale of goods or services by a company before any expenses are subtracted.