Other Things the Same, a Higher Interest Rate Induces People

question 35

Multiple Choice

Other things the same, a higher interest rate induces people to

• A)save more, so the supply of loanable funds slopes upward.
• B)save less, so the supply of loanable funds slopes downward.
• C)invest more, so the supply of loanable funds slopes upward.
• D)invest less, so the supply of loanable funds slopes downward.

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Definitions:

Portfolio

In finance, a collection of investments.

Projects

Individual or collaborative efforts undertaken to achieve a specific goal within a certain timeframe.

Monte Carlo Simulation

A computational technique that utilizes random sampling and statistical modeling to estimate mathematical functions and mimic the operation of complex systems.

Probability Distributions

A mathematical function that outlines every potential value and their probabilities that a random variable might assume across a specified spectrum.