Which of the Following Factors Would Be Most Likely to Lead

question 30

Multiple Choice

Which of the following factors would be most likely to lead to an increase in interest rates in the economy?

• A) Households reduce their consumption and increase their savings.
• B) The Federal Reserve decides to try to stimulate the economy.
• C) There is a decrease in expected inflation.
• D) The economy falls into a recession.
• E) Most businesses decide to modernize and expand their manufacturing capacity,and to install new equipment to reduce labor costs.

Understand how prices and income influence consumer demand.

Analyze utility functions to determine good consumption amounts.

Evaluate how changes in income affect consumer budget and choices.

Identify optimal consumption points using indifference curves and budget lines.

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Definitions:

Pitch

A presentation or proposal aimed at convincing someone to support, buy, or agree to something.

Rate

A measure or quantity measured against another quantity or measure, such as speed (distance per unit of time) or frequency of occurrence.

Jargon

Specialized language used by members of a particular profession or group that may be difficult for others to understand.

Verbal Fillers

Words or sounds used in speech as pauses or to give the speaker time to think, often without adding meaning.