Question

Which of the following is likely to cause a decrease in the equilibrium U.S. interest rate, other things being equal? a. an increase in inflation b. a decrease in saving by U.S. households c. a decrease in saving by foreign savers d. pessimistic economic projections that cause businesses to reduce expansion plans

Answer 1

The correct answer is d. pessimistic economic projections that cause businesses to reduce expansion plans.

Step-by-step explanation:

Economic projections are quantitative studies which seek to describe how the growth of an economy will be in a certain period of time towards the future. These are based on existing economic models, in addition to historical reports, to identify patterns in which they know where the economy will go.

This information is of great interest to different sectors, for example, investors will always be interested in knowing which sectors of the industry will grow in the future, to invest in shares of leading companies in that area; people are always eager to know how the economy will be, in order to decide if it is good time to spend or save; Well, governments can do these studies to find out if it is necessary to implement any program to prevent economic problems.