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If Interest Rates Rise

Question 43

Multiple Choice

If interest rates rise,


A) firms are willing to borrow more money because their rates of return have increased.
B) households are willing to borrow more money because their rates of return have increased.
C) firms are willing to borrow less money because their costs of borrowing has increased.
D) foreign entities are willing to borrow more money because their rates of return have increased.
E) it must mean that inflation has decreased because nominal rates have increased.

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