If investment spending increases due to increased optimism in the business sector,which of the following would occur?
A) an increase in GDP,an increase in the price level,an increase in money demand,and an increase in the interest rate
B) an increase in GDP,a decrease in the price level,an increase in money demand,and a decrease in the interest rate
C) a decrease in GDP,a decrease in the price level,a decrease in money demand,and a decrease in the interest rate
D) a decrease in GDP,a decrease in the price level,an increase in money demand,and an increase in the interest rate
E) an increase in GDP,an increase in the price level,a decrease in money demand,and a decrease in the interest rate

Question

Quizplus · Accepted Answer

Increased investment spending boosts GDP and the price level due to higher demand. This raises money demand and interest rates as businesses seek more funds for investment.

If Investment Spending Increases Due to Increased Optimism in the Business