The Interest Rate Is __________ Related to Changes in Income

question 44

Multiple Choice

The interest rate is __________ related to changes in income, __________ related to changes in money supply, and __________ related to changes in expected inflation.

• A)positively, positively, positively
• B)negatively, negatively, negatively
• C)positively, negatively, negatively
• D)positively, negatively, positively

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Definitions:

Budget Line

A graphical representation of all possible combinations of two goods that an individual can afford given the prices of the goods and the consumer's income.

Music Downloads

Digital files of music tracks that are purchased and downloaded from the internet to a computer or mobile device.

Consumption

The use of goods and services by households, leading to the satisfaction of human wants or needs.

Cappuccinos

Espresso-based coffee drinks that are typically composed of equal parts espresso, steamed milk, and milk froth.