Other things the same,as the price level falls,which of the following increases?
A)lending and investment spending
B)lending,but not investment spending
C)investment spending,but not lending
D)neither investment spending nor lending

Question

Quizplus · Accepted Answer

As the price level falls, the interest rate decreases, making borrowing cheaper. This leads to an increase in investment spending and also increases the amount of borrowing and lending, hence A is the correct answer.

Other Things the Same,as the Price Level Falls,which of the Following