Which of the following factors would be most likely to lead to an increase in nominal interest rates?
A) Households reduce their consumption and increase their savings.
B) A new technology like the Internet has just been introduced,and it increases investment opportunities.
C) There is a decrease in expected inflation.
D) The economy falls into a recession.
E) The Federal Reserve decides to try to stimulate the economy.

Question

Quizplus · Accepted Answer

If the new technology were so efficient that it takes an underdeveloped economy from a subsistence level,where savings are necessarily low and rates high,to a level where people can afford to save,this might cause interest rates to decline.However,it would take time for this to occur.

Which of the Following Factors Would Be Most Likely to Lead