An Increase in the Interest Rate Would Induce People to

question 467

Multiple Choice

An increase in the interest rate would induce people to

• A) sell shares of stock and buy bonds, but would have no effect on their desire to hold money.
• B) get rid of all their money and buy stocks with it.
• C) sell their least liquid assets and hold more money in case interest rates go up again.
• D) hold a smaller fraction of their wealth in the form of money.

---

Definitions:

Japan

An island country located in East Asia, known for its rich culture, technological advances, and historical heritage.

Ironic Mimicry

describes a situation or behavior where imitation is used sarcastically or humorously, often to critique or mock the original.

Parody Display

A humorous or satirical imitation of someone or something, often used in advertising or entertainment to engage or appeal to an audience.

Potlatch

A ceremonial feast among certain Native American peoples of the northwestern United States and Canada, involving the generous giveaway or destruction of property to affirm or enhance one's status.