An Increase in the Interest Rate Causes

question 212

Multiple Choice

An increase in the interest rate causes

• A)a movement up along the money demand curve.
• B)a movement down along the money demand curve.
• C)the money demand curve to shift to the left.
• D)the money demand curve to shift to the right.

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Definitions:

Utility Function

An equation representing a consumer's prioritization of various bundles of goods, thereby indicating their perceived benefit or welfare from those choices.

Consumption

The action of using up a resource or goods, often associated with the demand side of economics.

Income

Earnings received by an individual or business in exchange for work, services, or investments, typically measured over a certain period of time.

Pareto Efficient

An allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off.