Asked by
Penelope Kerber
on Oct 13, 2024
Verified
In the classical theory of employment,a rise in the rate of interest will
A) increase saving and decrease investment.
B) decrease saving and increase investment.
C) increase saving and investment.
D) decrease saving and investment.
Classical Theory
An economic theory proposing that free markets can regulate themselves through the relationship of supply and demand without government intervention.
Interest Rate
The percentage charged on a sum of money borrowed or earned on a sum of money invested, typically expressed as an annual percentage rate.
Saving
The portion of income not spent on current consumption but set aside for future use, often put into investments or deposit accounts.
- Examine how fluctuations in interest rates influence savings and investments from both classical and Keynesian viewpoints.
Verified Answer
KT
Learning Objectives
- Examine how fluctuations in interest rates influence savings and investments from both classical and Keynesian viewpoints.