According to Classical Economists, a Decrease in the Rate of Interest

question 168

Multiple Choice

According to classical economists, a decrease in the rate of interest will

• A) increase unemployment.
• B) increase consumer saving.
• C) increase investment.
• D) increase the inflation rate.

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Definitions:

Elastic

Elasticity in economics refers to the responsiveness of demand or supply to changes in price or income.

Completely Inelastic

Describes a situation where the demand or supply for a good or service does not change in response to changes in price.

Inelastic

Describes a situation where the demand or supply for a good or service is relatively unresponsive to changes in price.

Elastic

Describes a situation in economics where the supply or demand for a good or service significantly changes in response to changes in price.