According to the Interest Rate Effect, as the Price Level

question 88

Multiple Choice

According to the interest rate effect, as the price level rises,:

• A) people feel poorer and buy less.
• B) United States products become more expensive and foreigners buy less U.S. goods.
• C) interest rates fall, and people buy less.
• D) interest rates rise, and people buy less.

---

Definitions:

Payroll

The total amount of wages and salaries paid by a company to its employees.

Fundamental Analysis

Assessment of firm value that focuses on earnings and dividends prospects, expectations for future interest rates, and risk evaluation.

Earnings

The amount of money that a company makes during a specific period, usually defined as profit after all expenses have been subtracted from revenue.

Dividends

Payments made by a corporation to its shareholder members, typically a portion of the earnings decided by the board of directors.