When Interest Rates Go Up, It Is

question 38

Multiple Choice

When interest rates go up, it is:

• A)more expensive for businesses to borrow, so investment falls.
• B)more expensive for businesses to borrow, so investment increases.
• C)cheaper for businesses to borrow, so investment falls.
• D)cheaper for businesses to borrow, so investment increases.

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Definitions:

Independent Variable

A variable in an experiment that is manipulated to determine its effect on the dependent variable.

Dependent Variable

The variable in an experiment that is observed and measured to see how it is influenced by the independent variable.

Correlation Coefficient

A numerical measure that indicates the extent of a linear relationship between two variables, ranging from -1 to 1.

Independent Variable

The variable in an experiment that is manipulated or changed to observe its effect on the dependent variable.