An Increase in Interest Rates Is Likely to Cause

question 145

Multiple Choice

An increase in interest rates is likely to cause

• A) firms and households to increase the quantity of money demanded.
• B) firms and households to decrease the quantity of money demanded.
• C) the money demand curve to shift to the right.
• D) the money demand curve to shift to the left.

---

Definitions:

Splitting Responsibility

Dividing duties, tasks, or obligations among individuals or groups to ensure accountability and efficiency in achieving objectives.

Cognitive Dissonance

A psychological state characterized by experiencing conflicting thoughts, beliefs, or attitudes, especially relating to behavioral decisions and attitude change.

Z Problem-Solving Model

An approach to problem-solving that integrates both analytical and intuitive strategies, often represented in four stages resembling the letter "Z".

Nonpreferences

The absence of a preference or inclination towards any particular option or choice.