A result of an increase in consumption without any change in income is an increase in the equilibrium interest rate.

Question

Quizplus · Accepted Answer

An increase in consumption without any change in income leads to an increase in demand for goods and services, which in turn leads to an increase in the demand for money. This increased demand for money results in an increase in the equilibrium interest rate, as lenders will seek a higher return on their loans to meet the increased demand for funds.

A Result of an Increase in Consumption Without Any Change