If Interest Rates Increase, What Is Most Likely to Happen

question 138

Multiple Choice

If interest rates increase, what is most likely to happen to the total expenditure schedule?

• A)It will increase because G increases.
• B)It will decrease because I decreases.
• C)It will decrease because (X - IM) decreases.
• D)It will increase because I increases.

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Definitions:

AC

Alternating Current, a type of electrical current where the flow of electric charge periodically reverses direction.

Galvanometer

A meter movement requiring microamperes to cause a full-scale deflection. Many galvanometers have a zero center, which permits them to measure both positive and negative values.

Digital Ammeter

An instrument used to measure electric current flow in a circuit, displaying the value digitally for accuracy and ease of reading.

Voltmeter

An instrument used for measuring the electrical potential difference between two points in an electric circuit.