A Higher Interest Rate ________ and ________

question 57

Multiple Choice

A higher interest rate ________ and ________.

• A) reduces the present value of future income; reduces today's consumption
• B) increases the present value of future income; increases today's consumption
• C) increases the discount rate; increases today's consumption
• D) is an incentive to borrow more today; reduces future consumption
• E) reduces inflation; consumers spend more today

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Definitions:

Decentering

A cognitive ability to consider multiple aspects of a situation or adopt another person's perspective, vital in developing empathy and solving problems effectively.

Preoperational

A developmental stage in Jean Piaget's theory, characterized by symbolic thought and egocentrism, typically from ages 2 to 7.

Concrete Operational

A stage in Piaget's theory of cognitive development where children aged 7-12 years develop logical thinking but still struggle with abstract concepts.

Tertiary Circular Reactions

A cognitive developmental phase in Jean Piaget's theory, occurring around 12 to 18 months of age, during which infants begin to experiment and explore the properties of objects through novel actions.