If interest rates rise then costs are likely to _______ and demand is likely to _________?

Related Mcqs:

1. If VAT rates rise, then costs are likely to ___ and demand is likely to ____?

   A. rise; rise
   B. rise; fall
   C. fall; fall
   D. fall; rise

2. Under floating exchange rates, expectations of higher interest rates are likely to cause an ____ of the exchange rate?

   A. depreciation
   B. appreciation
   C. fall
   D. devaluation

3. The motive for holding money that encourages investors to hold bonds when interest rates are low, with the hope of selling them when interest rates are high, is the ?

   A. Transactions motive
   B. precautionary motive
   C. profit motive
   D. speculation motive

4. Investor engage in _____ when they move funds into foreign currencies in order to take advantage to interest rates abroad that are higher than domestic interest rates ?

   A. currency arbitrage
   B. interest arbitrage
   C. short positions
   D. long positions

5. If the economy is at the peak of the business cycle, aggregate demand ____ unemployment _______ inflation _______ and the current account of the balance of payments is likely to move towards _______?

   A. rise; falls; rise; deficit
   B. falls; rises; falls; surplus
   C. falls; falls; falls; surplus
   D. is static; low; rises; deficit

6. One of the transmission mechanisms of monetary policy is through consumer demand when interest rates ________ household wealth ________ and consumption _________?

   A. rise; increase, increase
   B. rise, falls, increase
   C. rise, increase, falls
   D. rise, falls, falls

7. During Periods of rising inflation and rising interest rates we expect the demand for real cash to ?

   A. rise
   B. fall
   C. not changes
   D. fluctuates

8. A fall in interest rates is likely to ?

   A. Increase aggregate demand
   B. Increase savings
   C. Decrease consumption
   D. Decrease exports

9. Lower interest rates are likely to ?

   A. Decrease consumption
   B. increase cost of borrowing
   C. Encourage saving
   D. Increase spending

10. In the events of an increase in the international price of oil that encouraged the central bank to accept lower real interest rates, inflation would most likely ?

    A. fall
    B. increase
    C. remain the same
    D. fluctuates