Other things being equal,what effect would an appreciable increase in interest rates have?
A)an increase in exports
B)a decrease in consumption
C)an increase in investment spending
D)a decrease in savings

Question

Quizplus · Accepted Answer

An appreciable increase in interest rates would make borrowing more expensive, leading to a decrease in consumption as people are less likely to take out loans for big purchases like houses and cars. They might also start saving more money instead of spending it, leading to a decrease in consumption overall. The other options (A, C, and D) are unlikely to occur as a direct result of higher interest rates.

Other Things Being Equal,what Effect Would an Appreciable Increase in Interest