If Pakistani citizens become less concerned with the future and save less at each real interest rate ?
Correct answer: A. Real interest rates rise and investment falls
- A. Real interest rates rise and investment falls
- B. Real interest rates rise and investment rises
- C. Real interest rates fall and investment rises
- D. Real interest rates fall and investment falls
Explanation
Lower saving at every real interest rate shifts the supply of loanable funds left, raising the equilibrium interest rate. Higher borrowing costs reduce the quantity of funds demanded for investment.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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