Higher interest rates tend to
A)reduce the quantity demanded of goods and services.
B)lower the costs of building new plants and equipment.
C)increase the quantity demanded of goods and services.
D)make it less costly for people to buy houses and cars.

Question

Quizplus · Accepted Answer

Higher interest rates make borrowing more expensive, which in turn reduces the quantity demanded of goods and services as people and businesses are less likely to take out loans to finance purchases or investments.

Higher Interest Rates Tend to