Lower Real Interest Rates

question 132

Multiple Choice

Lower real interest rates

• A)tend to shift the consumption function upward.
• B)have no significant effect on consumption.
• C)tend to shift the consumption function downward.
• D)tend to move the consumer upward along the consumption function.

---

Definitions:

Constant Fraction

A concept in finance where a fixed percentage of an investment is allocated or rebalanced regularly to maintain a desired asset ratio.

Additional Debt

New borrowing by an individual or entity, adding to any existing obligations, and impacting financial leverage and risk profile.

Maximum Capacity

The highest level of output that a company can sustain to make a product or provide a service, under normal conditions.

Dividend Payout Ratio

A financial metric indicating the percentage of a company's earnings paid out to shareholders in the form of dividends.