An Increase in the Prevailing Interest Rate

question 38

Multiple Choice

An increase in the prevailing interest rate

• A) increases the present value of future returns from investment, and increases investment.
• B) decreases the present value of future returns from investment, and decreases investment.
• C) decreases the present value of future returns from investment, and increases investment.
• D) increases the present value of future returns from investment, and decreases investment.

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Definitions:

Conditioned Stimulus

A previously neutral stimulus that, after association with an unconditioned stimulus, comes to trigger a conditioned response.

Innate Response

Natural or instinctive reactions that organisms are born with, not learned through experience.

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without any prior learning or conditioning.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with the unconditioned stimulus, eventually comes to trigger a conditioned response.