If the interest rate is decreased in an economy, it will

Answer

increase the investment expenditure in the economy

(a) Decrease the consumption expenditure: Lower interest rates generally discourage saving and can encourage borrowing, so consumption usually does not decrease. Verdict: Incorrect.
(b) Increase the tax collection of the Government: Tax collection depends on income, production, and tax policy; a fall in interest rate does not directly ensure higher tax revenue. Verdict: Incorrect.
(c) Increase the investment expenditure: Lower interest rates reduce the cost of borrowing, making firms more willing to invest. Verdict: Correct.
(d) Increase the total savings: Lower interest rates reduce returns on savings, so savings generally do not increase. Verdict: Incorrect.