Figure 4.2

-In Figure 4.2,one possible explanation for the increase in the interest rate from i? to i? is
A) an increase in economic growth.
B) an increase in government budget deficits.
C) a decrease in government budget deficits.
D) a decrease in economic growth.
E) a decrease in the riskiness of bonds relative to other investments.

Question

Figure 4.2
 
-In Figure 4.2,one possible explanation for the increase in the interest rate from i? to i? is
A) an increase in economic growth. 
B) an increase in government budget deficits. 
C) a decrease in government budget deficits. 
D) a decrease in economic growth. 
E) a decrease in the riskiness of bonds relative to other investments.

Quizplus · Accepted Answer

An increase in economic growth can lead to higher interest rates as demand for borrowing increases, pushing up the cost of borrowing.

Figure 4.2 -In Figure 4.2,one Possible Explanation for the Increase in the the Increase