Other Things the Same, When the Interest Rate Rises

question 27

Multiple Choice

Other things the same, when the interest rate rises

• A) people would want to lend more, making the supply of loanable funds increase.
• B) people would want to lend less, making the supply of loanable funds decrease.
• C) people would want to lend more, making the quantity of loanable funds supplied increase.
• D) people would want to lend less, making the quantity of loanable funds supplied decrease.

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Definitions:

Homogamy

The practice or tendency for individuals to marry others who share similar characteristics, such as socio-economic status, values, or ethnicity.

Open System

A social system with ample opportunities to move from one class to another.

Closed System

A physical system that does not allow certain types of transfers (such as transfer of mass) in or out of the system.

Structural Mobility

The mobility of individuals or groups within or between social strata, facilitated by changes in the economy or the social structure of a society, rather than by personal achievement.