Decrease in demand for loans : Lower real interest rates :: Decrease in investor confidence : ?

When there is a decrease in demand for loans, it often leads to lower real interest rates because lenders want to attract more borrowers. Similarly, if there is a decrease in investor confidence, it can lead to a reduction in investments in the economy. This decrease in confidence often means that investors are less willing to take risks, which can lead to lower levels of investment spending. For example, if a company is unsure about future profits, it might hold back on expanding its operations, which can slow down economic growth. Therefore, just as lower demand for loans can lower interest rates, decreased investor confidence can lead to reduced investment activity.