What is the impact of higher interest rates on long-term economic growth and capital investments?

• A. Higher interest rates have no impact on capital investments or long-term economic growth.
• B. Higher interest rates increase capital investments, but slow long-term economic growth.
• C. Higher interest rates reduce capital investments, leading to slower long-term economic growth.
• D. Higher interest rates increase capital investments, leading to faster long-term economic growth.

Answer: (C)