Investment in a project will take place if the
A) marginal propensity to save exceeds the marginal propensity to consume.
B) expected rate of return exceeds the interest rate.
C) interest rate exceeds the marginal propensity to save.
D) net investment in the economy exceeds gross investment.
E) multiplier exceeds the expected rate of return.

Question

Quizplus · Accepted Answer

Investment will take place if the expected rate of return exceeds the interest rate. This is because investors will only invest if they expect to earn a higher return on their investment than the interest they could earn by simply saving their money.

Investment in a Project Will Take Place If the