The variable that connects the market of money and the market of goods via investment spending is ________.a.The MPCb.The interest ratec.The MPSd.The CPI

To analyze the relationship between the money market and the goods market through investment spending, we need to consider the role of various economic concepts:

1. Understanding Investment Spending: Investment spending is influenced by the cost of borrowing, which is represented by the interest rate. When interest rates are lower, borrowing becomes cheaper, encouraging businesses to invest in capital goods, which in turn affects the economy's productive capacity.

2. Examining the Options:

   • a. The MPC (Marginal Propensity to Consume): This relates to consumer spending rather than investment spending.
   • b. The interest rate: This directly influences investment decisions as it determines the cost of financing investments.
   • c. The MPS (Marginal Propensity to Save): Similar to MPC, it deals with savings rather than direct investment.
   • d. The CPI (Consumer Price Index): This measures inflation, which can have indirect effects but is not a direct connection.

3. Conclusion: The variable that connects the market of money and the market of goods via investment spending is clearly the interest rate (b), as it plays a crucial role in determining the level of investment in the economy.

Final Answer

The interest rate (b).