This question is on the determination of the real interest rate in the long run.

Use the diagram showing savings and investments as functions of the real interest rate to answer the following question: What happens to the real interest rate and investment if there is a temporary decrease in production, for example, a bad harvest?

Select one or more:

a.The real interest rate increases and investment increases

b.The real interest rate increases and investment decreases

c.The real interest rate decreases and investment increases

d.The real interest rate decreases and investment decreases