A Lower Equilibrium Interest Rate

question 41

Multiple Choice

A lower equilibrium interest rate

• A) increases saving, reduces total spending, and increases total output.
• B) decreases saving, increases total spending, and decreases total output.
• C) increases investment, increases total spending, and increases total output.
• D) decreases investment, decreases total spending, and increases total output.

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Definitions:

Canadian Bill

Short-term government securities issued by the Canadian government, similar to Treasury bills in the United States.

Indifferent

Refers to a state or condition where an individual or decision-maker does not prefer one option over another due to a perceived equality in value or benefit.

Internationally-Diversified Portfolio

An investment portfolio that includes assets from a variety of countries outside the investor's home country to reduce risk and enhance returns.

Country Selection

Asset allocation in which the investor chooses among investments in different countries.