Everything else being constant, a lower real interest rate
A)increases desired saving and net exports.
B)decreases desired saving but increases net exports.
C)increases desired saving and investment.
D)increases desired investment but decreases net exports.

Question

Quizplus · Accepted Answer

A lower real interest rate decreases the incentive for saving due to lower returns, but it can make borrowing cheaper for investing in domestic and foreign markets, potentially increasing net exports by making a country's goods more competitive abroad.

Everything Else Being Constant, a Lower Real Interest Rate