What Happens to Saving When Interest Rates Rise

question 42

Multiple Choice

What happens to saving when interest rates rise?

• A) It increases.
• B) It decreases.
• C) It can increase or decrease.
• D) Saving decisions are independent of interest rates.

---

Definitions:

Consumer Surplus

The difference between the total amount consumers are willing and able to pay for a good or service and the total amount they actually pay.

Market Price

The amount for which something can currently be purchased or sold within a marketplace, reflecting supply and demand conditions.

Squeeze Out Profits

Strategies or actions taken by companies to increase profit margins, often by reducing costs or increasing efficiency, sometimes under competitive pressure.

Graph Drawing

A method of representing structural information as diagrams of abstract graphs and networks.