An increase in the real interest rate will
A) most likely lower the reward to savings.
B) most likely lower the cost of borrowing.
C) most likely lower consumers' purchases of durable goods.
D) cause consumers to spend more and save less.
C
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The notion that lenders must select from a pool of bad credit risks, because the most undesirable borrowers are those that most actively seek out a loan is known as the ________
A) moral hazard problem B) ornamental torsion problem C) adverse selection problem D) asymmetric innovation problem
Since almost all forms of transportation produce some type of pollution,
a. the government should ban all transportation. b. the government should ban all pollution. c. society has to weigh the cost and benefits when deciding how much pollution to allow. d. refrain from intervening because the market can best solve this problem.