The relationship in the above figure suggests that when the interest rate is 5 percent
A) a decrease in income will be associated with a decrease in expenditures.
B) a decrease in income will be associated with an increase in expenditures.
C) an increase in income will be associated with a decrease in expenditures.
D) there is no relationship between expenditures and income.

Question

Quizplus · Accepted Answer

A decrease in income generally leads to a decrease in expenditures because individuals or entities have less money to spend.

The Relationship in the Above Figure Suggests That When the Interest