If the interest rate increased, which of the following would occur?
a. Nothing would occur.
b. The consumption-income line would shift downward.
c. The consumption-income line would shifts upward.
d. There would be an rightward movement along the consumption-income line.
e. There would be a leftward movement along the consumption-income line.
B
You might also like to view...
Banks who held mortgage-backed securities "took a bath" during the financial crisis of 2007-2009 due to:
A) rising yields in secondary markets which led to a decline in the price of mortgage-backed securities. B) falling yields in secondary markets which led to a decline in the price of mortgage-backed securities. C) their inability to issue new mortgages. D) more rapid pre-payment of mortgages.
Which of the following events could explain an increase in interest rates together with a decrease in investment?
a. The government budget went from surplus to deficit. b. The government instituted an investment tax credit. c. The government reduced the tax rate on savings. d. None of the above is correct.