If Interest Rates Increase, What Will Happen to the Demand

question 175

Multiple Choice

If interest rates increase, what will happen to the demand for reserves?

• A)It will shift outward.
• B)It will shift inward.
• C)Nothing, the economy will move to a new quantity demanded.
• D)It depends on what happens to prices.

---

Definitions:

Laid-back

Having a relaxed or casual manner; not overly stressed or anxious.

Type B

Refers to a personality type characterized by lower stress levels, a relaxed attitude, and a patient demeanor, in contrast to Type A personalities.

General Adaptation Syndrome

A model describing the body's short-term and long-term reactions to stress, consisting of three stages: alarm, resistance, and exhaustion.

Exhaustion

A state of extreme physical or mental fatigue often resulting from stress, overwork, or illness, making it difficult to function effectively.