Everything Else Being Equal,a Higher Interest Rate

question 195

Multiple Choice

Everything else being equal,a higher interest rate

• A) increases consumption spending as people face increasing debt
• B) reduces consumption spending as people have a greater incentive to save
• C) does not change consumption spending because consumption is only affected by income
• D) does not change total consumption spending,but does change who does the spending
• E) reduces both consumption spending and saving as people face increased debt.