3. Which of the following is a likely result of an increase in interest rates?

Question

3. Which of the following is a likely result of an increase in interest rates?

A. People are more likely to save money.

B. Banks are more likely to lend money.

C. Companies are more likely to increase their spending.

D. Houses and cars become more affordable.

Answer 1

A. People are more likely to save money is a likely result of an increase in interest rates. When interest rates increase, people can earn higher returns on their savings, leading to a tendency to save more money. Higher interest rates can also make borrowing more expensive, discouraging people from taking out loans to spend on large purchases, like houses or cars.