Real world economic data supports the view that higher interest rates are associated with ________.
A)higher saving and consumption
B)lower saving and higher consumption
C)higher saving and lower consumption
D)lower saving and consumption

Question

Quizplus · Accepted Answer

Real world economic data shows that higher interest rates lead to higher saving and lower consumption. This is because higher interest rates incentivize people to save more and borrow less, therefore reducing consumption. Additionally, higher interest rates often lead to higher costs of borrowing for businesses, which can also reduce investment and consumption.

Real World Economic Data Supports the View That Higher Interest