What Happens When Interest Rates Rise

question 43

Multiple Choice

What happens when interest rates rise?

• A) Discretionary income increases
• B) The demand for discretionary goods increases
• C) Discretionary income is unchanged
• D) The demand for discretionary goods decreases
• E) discretionary income increases and the demand for discretionary goods decreases

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Definitions:

Type II Error

The failure to reject a false null hypothesis, commonly referred to as a "false negative" finding.

Sample Size

The number of observations or data points in a study or experiment.

Null Hypothesis

A statement that assumes no relationship or difference between certain variables.

Type I Error

Type I Error occurs when a true null hypothesis is incorrectly rejected, often symbolized as the false positive rate in hypothesis testing.