If Interest Rates Increase to a Very High Level, People

question 183

Multiple Choice

If interest rates increase to a very high level, people will most likely hold

• A) more money in savings accounts and less cash.
• B) less money in savings accounts and less cash.
• C) less money in savings accounts and more cash.
• D) more money in savings accounts and more cash.

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Definitions:

Profit-Maximizing Firm

A business entity's objective of adjusting production and sales to achieve the highest possible profit levels.

Wage Rate

The amount of money a worker is paid per unit of time, such as an hour or a month.

Marginal Cost

The cost related to the production of an additional unit of a product or service.

Price Taker

A seller (or buyer) that is unable to affect the price at which a product or resource sells by changing the amount it sells (or buys).