Which of the following statements is true?

Question

Quizplus · Accepted Answer

When the real interest rate increases, the cost of borrowing increases, which makes it more expensive for consumers to finance current consumption. As a result, the opportunity cost of current consumption increases. The other options are not true because an increase in the nominal wage rate or real wage rate would indicate an increase in income, which could increase the ability to consume goods and services, and an increase in the unemployment rate would indicate a decrease in income, which could decrease the ability to consume goods and services. However, none of these factors affect the opportunity cost of consumption directly.

Which of the Following Statements Is True