Empirical evidence indicates that lower real interest rates lead to ______ in savings.
A) modest increases
B) substantial increases
C) no change in
D) modest decreases

Question

Quizplus · Accepted Answer

Lower interest rates, indeed, are shown to slightly decrease the rate of saving as savers find it less rewarding to save, and not worth the opportunity cost of reduced spending, at these lower real interest rates.

Empirical Evidence Indicates That Lower Real Interest Rates Lead to ______