According to classical economists, a decrease in the rate of interest will
A)increase unemployment.
B)increase consumer saving.
C)increase business investment.
D)increase business failures.

Question

Quizplus · Accepted Answer

According to classical economists, a decrease in the rate of interest will lead to an increase in business investment as it becomes cheaper for firms to borrow money for investments. This increase in investment can lead to economic growth and job creation, as firms expand their operations. The other options (A, B, and D) are not supported by classical economic theory.

According to Classical Economists, a Decrease in the Rate of Interest