An Increase in the Interest Rate

question 13

Multiple Choice

An increase in the interest rate

• A)decreases the opportunity cost of holding money.
• B)increases the opportunity cost of holding money.
• C)decreases the percentage yield of holding money.
• D)increases the percentage yield of holding money.
• E)increases the value of alternative assets.

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Definitions:

Détente

A period of improved relations between two countries that were previously in conflict or tension.

Soviet Union

A federal socialist state in Eastern Europe and Asia, existing from 1922 to 1991, and was a major player in global affairs.

Foreign Policy

A government's strategy in dealing with other nations, including diplomacy, military action, and other interactions.

1972 Summit

A significant series of meetings during the Cold War, particularly referring to the historic Summit Series ice hockey competition between Canada and the Soviet Union.