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Questions and Answers
What is a potential effect of higher interest rates on savers?
What is a potential effect of higher interest rates on savers?
- Increase in saving
- Decrease in spending
- Increase in spending (correct)
- Decrease in saving
How might higher interest rates influence the exchange rate?
How might higher interest rates influence the exchange rate?
- Increase imports
- No effect on the exchange rate
- Encourage capital inflows (correct)
- Lead to depreciation
What could be a consequence of lower demand in the economy?
What could be a consequence of lower demand in the economy?
- Decrease in unemployment
- Higher government spending
- Increase in government tax income
- Higher unemployment (correct)
How might low investment impact future economic growth?
How might low investment impact future economic growth?
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What could result from the corporate sector losing confidence in the economy?
What could result from the corporate sector losing confidence in the economy?
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Why might demands for higher wages increase in an environment of rising mortgage payments?
Why might demands for higher wages increase in an environment of rising mortgage payments?
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How does an appreciation in the exchange rate affect imports?
How does an appreciation in the exchange rate affect imports?
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