As the Prevailing Interest Rate Increases, All of the Following

question 94

Multiple Choice

As the prevailing interest rate increases, all of the following occur except

• A) Quantity demanded of loanable funds decreases.
• B) Quantity supplied of loanable funds increases.
• C) Cost of borrowing rises.
• D) Supply curve for savings shifts to the right.

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Definitions:

Myelination

Myelination is the process by which nerve fibers are coated with myelin, a fatty substance that speeds up the transmission of electrical signals along neurons.

Information Processing

A theory describing the analysis, manipulation, and storage of information by the brain.

Elaborative Rehearsal

The kind of coding in which new information is related to information that is already known.

Levels-of-processing Model

A theory suggesting that memory retention is directly related to the depth of mental processing of information, ranging from shallow to deep.