When the real interest rate is high,there are greater incentives to borrow and fewer incentives to lend.

Question

Quizplus · Accepted Answer

When the real interest rate is high, there are greater incentives to lend and fewer incentives to borrow. This is because high real interest rates mean higher returns on savings and investments, which encourages people to save more and lend more. On the other hand, high interest rates make borrowing more expensive, which discourages people from borrowing.

When the Real Interest Rate Is High,there Are Greater Incentives