Other Things Constant, an Increase in the Real Interest Rate

question 166

Multiple Choice

Other things constant, an increase in the real interest rate will

• A) cause consumers to reduce their purchases of durable items like appliances and automobiles.
• B) induce businesses to increase their level of investment.
• C) make borrowing money more attractive.
• D) increase the natural rate of unemployment.

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Definitions:

Cause-And-Effect

refers to a relationship between events or variables, where one is the result of the other or others.

Computer Ownership

The state or fact of owning a computer, indicating possession and responsibility for the hardware.

Life Expectancy

The average period that an individual is expected to live, based on statistical averages of age, gender, and other factors.

Lurking Variable

A variable that is not directly measured or included in a study but can affect the relationship between the studied variables.