Multiple Choice Questions on An increase in interest rates ........ for SEBI Grade A ( Officer) Exam Preparation

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Multiple Choice Questions

An increase in interest rates ........

Economics- Phase (I & II) Multiplier and Accelerator 
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    An increase in interest rates:

    Is likely to reduce savings

    Incorrect Answer

    Is likely to reduce the external value of the currency

    Incorrect Answer

    Leads to a shift in the MEC schedule

    Incorrect Answer

    Leads to a movement along the MEC schedule

    Correct Answer
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    Explanation:

    Higher interest rates increase the cost of borrowing and should decrease the amount of investment.

    By: Jyoti Das
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