If the Real Interest Rate Decreases, People Decide to ________

question 252

Multiple Choice

If the real interest rate decreases, people decide to ________ because the opportunity cost of ________.

• A) increase their consumption expenditure; saving has decreased.
• B) increase their consumption expenditure; consumption has decreased.
• C) decrease their consumption expenditure; consumption has decreased.
• D) save more; saving has decreased.
• E) None of the above answers are correct.

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Definitions:

Securities Act

A federal law enacted to regulate the offer and sale of securities to protect investors from fraud.

Securities and Exchange Commission

A U.S. federal agency responsible for enforcing federal securities laws and regulating the securities industry, stock and options exchanges.

Securities and Exchange Act

A U.S. law enacted in 1934 to regulate securities transactions on the secondary market, thereby protecting investors and maintaining fair and efficient functioning of the securities markets.

New York Stock Exchange

A leading global securities exchange where stocks, bonds, and other financial instruments are traded, located in New York City.