You Notice That When the Inflation Rate Increases, the Interest

question 271

Multiple Choice

You notice that when the inflation rate increases, the interest rate tends to increase. This observation indicates that

• A) there might be false causality between inflation and the interest rate.
• B) higher inflation rates must cause a higher interest rate.
• C) a scatter diagram of the inflation rate and the interest rate will show a positive relationship.
• D) the variables have an inverse relationship.

---

Definitions:

Bladder

A membranous sac or receptacle for a secretion; the gallbladder, urinary bladder.

Claustrophobia

An abnormal fear of being in enclosed or confined places.

Enclosed Places

Areas or environments that are surrounded by barriers such as walls or structures, limiting access and egress.

Enema

A procedure where liquid or gas is injected into the rectum, usually to expel its contents, but also to introduce drugs or permit X-ray imaging.