Multiple Choice
Which of the following best explains why there is a positive relationship between the interest rate and the supply of households' savings to the financial capital market?
A) a decrease in the interest rate increases the opportunity cost of current spending,which leads to an increase in desired saving
B) an increase in the interest rate increases the opportunity cost of current spending,which leads to a decrease in desired saving
C) an increase in the interest rate increases the opportunity cost of current spending,which leads to an increase in desired saving
D) an increase in the interest rate causes the investment demand curve to shift up
E) an increase in the interest rate causes the savings demand curve to shift up
Correct Answer:
Verified
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