If the Interest Rate Increases, Ceteris Paribus

question 68

Multiple Choice

If the interest rate increases, ceteris paribus,

• A)the demand curve for money shifts to the right.
• B)the demand curve for money shifts to the left.
• C)there is a movement downward along the demand curve for money.
• D)there is a movement upward along the demand curve for money.

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Definitions:

Period

A specified duration of time characterized by particular events, conditions, or phenomena.

Interest

The expense associated with taking out a loan, usually shown as a percentage of the total amount loaned.

Interest Earned

The amount of interest generated from an investment or savings over a certain period of time.

Account

A record or statement of financial expenditure and receipts relating to a specific period or purpose; also used to refer to a customer's relationship with a financial institution.