How Does an Increase in the Interest Rate Affect the Demand

question 126

Multiple Choice

How does an increase in the interest rate affect the demand for goods and services?

• A) It increases the cost of borrowing and people consume more.
• B) It decreases the cost of borrowing and people consume more.
• C) It increases the cost of borrowing and people consume less.
• D) It decreases the cost of borrowing and people consume less.

---

Definitions:

Personal Status

The legal or social position of an individual, often in relation to marriage, family laws, or nationality.

Knowledge

Facts, information, and skills acquired through experience or education; the theoretical or practical understanding of a subject.

Friendship Networks

The web of relationships formed based on mutual friendship, support, and common interests within a social or professional context.

Advice Networks

These refer to structures within organizations where individuals seek and provide advice, information, and support to each other.