Given the Expected Rate of Return on All Possible Investment

Multiple Choice

Given the expected rate of return on all possible investment opportunities in the economy:

A) an increase in the real rate of interest will reduce the level of investment.
B) a decrease in the real rate of interest will reduce the level of investment.
C) a change in the real interest rate will have no impact upon the level of investment.
D) an increase in the real interest rate will increase the level of investment.