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.

Question

Quizplus · Accepted Answer

An increase in interest rates typically leads to higher borrowing costs, which can reduce consumer spending and shift the consumption-income line downward.

If the Interest Rate Increased,which of the Following Would Occur