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

Question

Quizplus · Accepted Answer

According to classical economists, a decrease in the rate of interest will encourage investment by making it cheaper to borrow money. This increase in investment can lead to an increase in economic growth and employment. It is not likely to directly affect consumer saving or the inflation rate.

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