The Interest Rate Paid on Bonds Increases from 4% to 7%.This

question 129

Multiple Choice

The interest rate paid on bonds increases from 4% to 7%.This will cause

• A)no change in the optimal balance of money because checking deposits don't earn interest.
• B)the optimal balance of money to increase because it raises the opportunity costs of holding money.
• C)the optimal balance of money to decrease because it raises the opportunity cost of holding money.
• D)the optimal balance of money to increase because it reduces the opportunity cost of holding money.

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Definitions:

Trait-Related Words

Vocabulary associated with or describing characteristic patterns of behavior, thought, and emotion identifiable in individuals.

Tightness

The characteristic of a culture or group that maintains strict norms and a low tolerance for deviant behavior.

Collectivism

Collectivism is a cultural value that emphasizes the importance of groups and collective actions, prioritizing group goals over individual desires or needs.

Agency

The capacity of individuals to act independently and make their own free choices.