When Households Decide to Hold More Money

question 63

Multiple Choice

When households decide to hold more money,

• A)interest rates fall and investment decreases.
• B)interest rates fall and investment increases.
• C)interest rates rise and investment increases.
• D)interest rates rise and investment decreases.

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Definitions:

Need Theories

Psychological theories that focus on the inherent human needs driving behavior and motivation.

Process Theories

Theories that focus on the psychological and behavioral processes that motivate individuals to act in certain ways.

Perceptual Biases

Psychological tendencies that cause the misinterpretation or distortion of a sensory stimulus or judgment.

Selective Perception

The process by which individuals perceive what they want in media messages while ignoring opposing viewpoints.