An Increase in U

question 69

Multiple Choice

An increase in U.S. interest rates causes a decrease in aggregate demand by _____ investment spending, _____ the dollar, and _____.

• A) increasing; appreciating; increasing imports
• B) decreasing; appreciating; increasing imports
• C) increasing; depreciating; increasing exports
• D) decreasing; depreciating; decreasing exports

---

Definitions:

Less Risk-averse Investors

Individuals who are willing to take on greater levels of investment risk in pursuit of higher returns.

Efficient Portfolios

Portfolios that offer the best possible expected return for their level of risk, based on modern portfolio theory.

Rates of Return

Rates of return measure the net gain or loss of an investment over a specified period, expressed as a percentage of the investment’s initial cost.

Standard Deviations

A measure of variability that quantifies the extent of deviations of a set of data points from their mean.