An increase in the interest rate will:
A)shift the MRP curve to the right.
B)shift the MRP curve to the left.
C)not affect the MRP curve.
D)rotate the MRP curve.

Name: An increase in the interest rate will: A)shift the MRP curve to the right. B)shift the MRP curve to the left. C)not affect the MRP curve. D)rotate the MRP curve.
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Question

Quizplus · Accepted Answer

An increase in the interest rate will make investments more expensive, thus reducing the expected return on investment, and shifting the MRP curve to the left.

An Increase in the Interest Rate Will