If the interest rate is decreased in an economy, it will:

CA Foundation · Business Economics · MTP · May 2026
If the interest rate is decreased in an economy, it will:
(A) A. decrease the consumption expenditure in the economy
(B) B. increase the tax collection of the Government
(C) C. increase the investment expenditure in the economy
(D) D. increase the total savings in the economy

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. increase the investment expenditure in the economy

Topics: Determination of National Income

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