A higher real interest rate _________ saving and __________ consumption spending.
A) increases;increases
B) increases;decreases
C) does not change;does not change
D) decreases;increases
E) decreases;decreases

Question

Quizplus · Accepted Answer

A higher real interest rate increases the opportunity cost of consumption, which makes saving more attractive and reduces consumption spending.

A Higher Real Interest Rate _________ Saving and __________ Consumption

A Higher Real Interest Rate _ Saving and __ Consumption