Answer to Question #10928 in Macroeconomics for Andrew Rumsey

Question

Which of the following would lead to an increase in the level of investment and an increase in the interest rate?
a) a decrease in the willingness to save/lend
b) a decrease in the willingness to borrow/invest
c) an increase in the willingness to save/lend
d) an increase in the willingness to borrow/invest

Answer 1

Answer is&
d) an increase in the willingness to borrow/invest
Because when willingness to borrow increases interest rate increases too, and when& willingness to
& invest grows up then level of investment grows up.