Interest Sensitive Consumption Is Negatively Impacted by Interest Rates Because

question 100

Multiple Choice

Interest sensitive consumption is negatively impacted by interest rates because when you

• A)pay cash for something, the price you really pay depends on the interest rate.
• B)buy something on installments (like a car)your payments are positively related to the interest rate so a higher interest rate would mean a higher payment, and therefore, less interest sensitive consumption.
• C)buy something on installments (like a car)your payments are negatively related to the interest rate so a higher interest rate would mean a higher payment, and therefore, less interest sensitive consumption.
• D)buy something you really need, the price you really pay depends on the interest rate.

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