A higher interest rate makes:
A)current consumption and leisure more expensive.
B)current consumption cheaper and current. leisure more expensive.
C)current consumption and leisure cheaper.
D)current consumption more expensive and current leisure cheaper.

Question

Quizplus · Accepted Answer

A higher interest rate increases the opportunity cost of consuming and enjoying leisure today, as it makes saving more attractive. This means that both current consumption and leisure become more expensive because you are foregoing the higher returns your money could earn if saved or invested.

A Higher Interest Rate Makes