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.

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Definitions:

Frequency

The rate at which a periodic event occurs, such as the number of waves passing a point in a given time period.

Specific Time Period

A distinct, defined duration marked by a start and end date or time, often used for analysis, planning, or historical reference.

Unaided Recall Test

A measure of memory where subjects are asked to remember information without cues or prompts, often used in marketing to assess brand recall.

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A measurable value that indicates the effectiveness, efficiency, and progress of a business or its processes towards achieving objectives.