Other Things the Same, a Higher Interest Rate Induces People

question 35

Multiple Choice

Other things the same, a higher interest rate induces people to

• A)save more, so the supply of loanable funds slopes upward.
• B)save less, so the supply of loanable funds slopes downward.
• C)invest more, so the supply of loanable funds slopes upward.
• D)invest less, so the supply of loanable funds slopes downward.

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Definitions:

Cheat

The act of acting dishonestly or unfairly in order to gain an advantage, especially in a game, examination, or competition.

Collusion

A secret or illicit cooperation or conspiracy, especially between parties to deceive or defraud others, often used in the context of businesses agreeing on prices.

Marginal Cost

The expenditure involved in the production of one more unit of a product or service.

Fixed Cost

Costs that do not vary with the level of output produced, such as rent, salaries, and insurance premiums.