Investment Is Generally Sensitive to Changes in the Real Interest

Investment is generally sensitive to changes in the real interest rate because

A) all three of the components of investment are sensitive to the interest rate.
B) nonresidential investment falls as the interest rate climbs because the higher rental price of capital inspires substitution into the relatively lessexpensive employment of labor.
C) residential investment falls as the interest rate climbs because the interest rate is a major component of the rental price of housing.
D) inventories fall as the interest rate climbs because the interest rate is a major component of the holding cost of inventories.
E) all of the above.