If the Interest Rate Increases, Then

question 4

Multiple Choice

If the interest rate increases, then

• A)households will decrease their level of saving.
• B)the supply of loanable funds will fall because it now costs more to borrow funds and people who were supplying the funds will realize that fewer people will be willing to borrow their funds.
• C)households will consume less and save more.
• D)government will consume more because it now costs more to borrow funds to buy goods.
• E)a, b, and d

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Definitions:

Longitudinal

A research design that involves repeated observations of the same variables over short or long periods of time.

Retests

The procedure of administering the same test multiple times to the same subjects at different points in time to measure changes or consistency.

Research Design

The framework or blueprint for conducting a scientific study, which includes the methods for collecting, analyzing, and interpreting data.

Cross-sectional Design

A research methodology that examines a population, or a representative subset, at a single point in time to make inferences about the population at that time point.