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Figure 4.1 -In Figure 4.1, the Most Likely Cause of the Increase

Question 42

Multiple Choice

Figure 4.1 -In Figure 4.1, the most likely cause of the increase in the equilibrium interest rate from i<sub>1</sub> to i<sub>2</sub> is A) an increase in the price of bonds. B) a business cycle boom. C) an increase in the expected inflation rate. D) a decrease in the expected inflation rate. Figure 4.1
-In Figure 4.1, the most likely cause of the increase in the equilibrium interest rate from i₁ to i₂ is

A) an increase in the price of bonds.
B) a business cycle boom.
C) an increase in the expected inflation rate.
D) a decrease in the expected inflation rate.

Correct Answer: