Assume That an Increase in Consumer Confidence Raises Consumers' Expectations

question 116

Multiple Choice

Assume that an increase in consumer confidence raises consumers' expectations of future income and thus the amount they want to consume today for any given income. This shift, in a neoclassical economy, will:

• A) lower investment and raise the interest rate.
• B) raise investment and lower the interest rate.
• C) lower both investment and the interest rate.
• D) raise both investment and the interest rate.

---

Definitions:

Severe Stress

An intense level of pressure or tension resulting from challenging circumstances.

Death Penalty

A legal punishment where an individual is put to death by the state as a consequence for a crime.

Imperfect Court Systems

Refers to judicial systems that may have flaws, inefficiencies, biases, or corruption, affecting fair and equitable justice delivery.

Question

A sentence expressed so as to elicit information through a reply.