-The relationship in the above figure suggests that when the interest rate is 5 percent,
A) a decrease in income will be associated with an increase in expenditures.
B) an increase in income will be associated with a decrease in expenditures.
C) a decrease in income will be associated with a decrease in expenditures.
D) there is no relationship between expenditures and income.

Question

-The relationship in the above figure suggests that when the interest rate is 5 percent,
A) a decrease in income will be associated with an increase in expenditures. 
B) an increase in income will be associated with a decrease in expenditures. 
C) a decrease in income will be associated with a decrease in expenditures. 
D) there is no relationship between expenditures and income.

Quizplus · Accepted Answer

When the interest rate is 5 percent, a decrease in income typically leads to a decrease in expenditures, as people have less disposable income to spend.

-The Relationship in the Above Figure Suggests That When the Interest