The nominal interest rate increases by 5 percent. What is the effect on investment?
a. The real interest rate increases and investment increases
b. The real interest rate decreases and investment decreases.
c. The real interest rate increases and investment decreases.
d. Cannot be determined from the given information
d
Economics
You might also like to view...
The value of a loan of $2,000 after a year at 2 percent interest is:
A. $2,040. B. $4,000. C. $2,400. D. $2,020.
Economics
In a fiduciary monetary system, the value of the money issued by a government is based on
A. public confidence in that currency's acceptability and predictability of value. B. the gold held in that government's vaults. C. its being made out of some material with a market value equal to a bill's face value. D. the ability to convert it to some valuable commodity.
Economics