Answer Happy

A. Because a rise in the real interest rate increases the opportunity cost of investment B. Because a rise in the real interest rate decreases the opportunity cost of investment C. Because a fall in the real interest rate decreases the opportunity cost of investment D. Because an increase in the interest rate leads households to increase their current consumption. Because an increase in the interest rate leads households to reduce their current consumption F. Because a decrease in the interest rate leads households to reduce their current consumption. G. Because a decrease in the interest rate leads households to increase their current consumption H. Because a fall in the real interest rate increases the opportunity cost of investment b. The market for financial capital is shown in the graph. Suppose the government pursued a fiscal expansion by increasing the level of government purchases. Use the line drawing tool to draw a single line to show the effect of this change in fiscal policy. Properly label your line. Carefully follow the instructions above, and only draw the required objects. What would happen to the equilibrium interest rate, the amount of investment in the economy, and the long-run growth rate in this situation? options are: an increase, a decrease for all three boxes This would result in an increase in the equilibrium interest rate, a decrease in the amount of investment in the economy, and an increase in the long-run growth rate. Etext pages Grapher please answer part "b" Real Interest Rate (i) Financial Capital ($) N'S NS ▸ One or more of your responses is incorrect. At least one of your answers is incorrect. If the government pursues an expansionary policy by increasing the level of government purchases, it will incur a larger deficit (or smaller surplus). This change amounts to a decrease in public saving and hence a decrease in national saving (NS). X