An increase in the expected real interest rate will have a
A)large negative impact on household saving.
B)large positive impact on household saving.
C)small positive impact on household saving.
D)small negative impact on household saving.

Question

Quizplus · Accepted Answer

An increase in the expected real interest rate typically provides more incentive for households to save, as the return on savings is higher, leading to a small positive impact on household saving.

An Increase in the Expected Real Interest Rate Will Have