Which of the Following Would You Expect to Increase the Equilibrium

question 219

Multiple Choice

Which of the following would you expect to increase the equilibrium interest rate?

• A)an increase in the percentage of income after net taxes that households save
• B)an increase in the budget deficit
• C)a decrease in the profitability of investment projects firms are considering
• D)a change from an income tax to a consumption tax

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Definitions:

Vicious-Circle-Of-Poverty

A self-perpetuating condition where low income leads to low savings and investment, resulting in continued poverty.

Capital Stock

The total amount of physical and financial assets owned by a firm or country.

Equitable Investment

Investing in a way that is fair and just, considering factors like social responsibility and ethical practices.

Economic Growth

An increase in the production of goods and services in an economy over time, typically measured by the rise in the Gross Domestic Product (GDP).