Assume that an increase in consumer confidence raises consumers' expectations of future income and thus the amount they want to consume today for any given income. This shift, in a neoclassical economy, will: lower both investment and the interest rate. lower investment and raise the interest rate. raise investment and lower the interest rate. raise both investment and the interest rate.

lower investment and raise the interest rate.

Explanation:

If consumers have positive economic expectations, then their marginal propensity to consume (MPC) will increase. That means that for every disposable dollar, a greater proportion will be used to consume goods and services and a smaller proportion will be left for savings.

Since private savings = investment, as the MPC increases, investment decreases. Since total savings decreases, the total amount of money available for borrowing and investing will decrease. Since the supply of available funds decreases, then the price of money (interest rate) will increase.

b. a single paragraph.

a paragraph is a series of sentences that are organized and make sense, and are all related to a single topic . almost every piece of writing you do that is longer than a few sentences should be organized into paragraphs. this is because paragraphs show a reader where the subdivisions of an essay begin and end, and thus the reader see the organization of the essay into subjects in order to be able to understand its main points.