If Inflation Is Expected to Decrease, Then ​

question 16

Multiple Choice

If inflation is expected to decrease, then ​

• A)savers will provide less funds at the existing equilibrium interest rate.
• B)the equilibrium interest rate will increase.
• C)the equilibrium interest rate will decrease.
• D)borrowers will demand more funds at the existing equilibrium interest rate.

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Definitions:

Normal Good

A good for which demand increases as consumer income rises, and decreases as consumer income falls.

Consumers Believe

Refers to the perceptions or expectations that consumers hold about a product, service, or market, which can significantly impact their purchasing decisions.

Substitute Good

A product or service that can be easily replaced with another by consumers, often because it performs a similar function.

Price of Fish

The cost for which fish is sold in the market, influenced by factors such as species, availability, demand, and fishing costs.