Higher Interest Rates Tend to

question 71

Multiple Choice

Higher interest rates tend to

• A)reduce the quantity demanded of goods and services.
• B)lower the costs of building new plants and equipment.
• C)increase the quantity demanded of goods and services.
• D)make it less costly for people to buy houses and cars.

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Definitions:

Domestic Market

The market within a country's borders, referring to the trading of goods and services.

Foreign Supplier

A company or individual that provides goods or services from outside the buyer's home country.

Comparative Advantage

The ability of a country or firm to produce a particular good or service at a lower opportunity cost than others, leading to more efficient global production and trade.

Dumping

The practice of selling a product in a foreign market at a price lower than its domestic market or below its cost of production, often to increase market share or eliminate surplus.