Which of the Following Factors Would Be Most Likely to Lead

question 45

Multiple Choice

Which of the following factors would be most likely to lead to an increase in nominal interest rates?

• A) Households reduce their consumption and increase their savings.
• B) A new technology like the Internet has just been introduced,and it increases investment opportunities.
• C) There is a decrease in expected inflation.
• D) The economy falls into a recession.
• E) The Federal Reserve decides to try to stimulate the economy.

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Definitions:

Banks

Financial institutions that accept deposits from the public, make loans, and provide various financial services, including currency exchange and wealth management.

Electricity

A form of energy resulting from the existence of charged particles such as electrons or protons, either statically as an accumulation of charge or dynamically as a current.

Expansion

A phase in the business cycle where economic activity is increasing, characterized by higher output, employment, and trade.

Time Period

A specific duration or interval of time, often used in the context of analysis, planning, or measurement within various fields including finance and economics.