A Reduction in Real Interest Rates Will Cause the Demand

Multiple Choice

A reduction in real interest rates will cause the demand for new homes to

A) increase, which results in an increase in investment expenditures.
B) increase, which results in an increase in consumption expenditures.
C) decrease, which results in a decrease in investment expenditures.
D) decrease, which results in a decrease in consumption expenditures.
E) increase, which will result in an increase in business fixed investment.