-In the above figure, if the interest rate is negatively related to household expenditures for any given level of household income, an increase in the interest rate will
A) make the line negatively sloped.
B) shift the line vertically downward.
C) cause no change in the lineʹs position.
D) shift the line vertically upward.

Question

-In the above figure, if the interest rate is negatively related to household expenditures for any given level of household income, an increase in the interest rate will
A) make the line negatively sloped. 
B) shift the line vertically downward. 
C) cause no change in the lineʹs position. 
D) shift the line vertically upward.

Quizplus · Accepted Answer

An increase in the interest rate, which is negatively related to household expenditures, will decrease household spending at any given income level, causing the line to shift vertically downward.

-In the Above Figure, If the Interest Rate Is Negatively