For an individual or family heavily in debt a rise in interest rates will stimulate a greater amount of savings because of the wealth effect.

Name: For an individual or family heavily in debt a rise in interest rates will stimulate a greater amount of savings because of the wealth effect.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A rise in interest rates increases the cost of borrowing, making it more expensive for individuals or families already in debt to pay off their loans or take on new debt, rather than stimulating savings.

For an Individual or Family Heavily in Debt a Rise