After the Money Supply Decreases, Which of the Following Would

question 61

Multiple Choice

After the money supply decreases, which of the following would most likely decrease as well?  

• A) planned investment, because interest rates increase 
• B) planned investment, because interest rates decrease 
• C) government spending, because interest rates increase 
• D) government spending, because interest rates decrease

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Definitions:

RRSP

Registered Retirement Savings Plan, a type of Canadian account for holding savings and investment assets, with advantageous tax benefits.

Annuity

A financial product that pays out a fixed stream of payments to an individual, typically used as part of a retirement strategy.

Compounded semi-annually

The process of adding interest to the principal sum of a loan or deposit, or "compounding," twice each year.

Deferral period

The time span during which payments or obligations are postponed or delayed.