8 What is likely to happen when the rate of interest increases? A) consumer spending increases B) firms buy fewer machines C) people hold more cash D) savers earn lower rewards
Answer:B)not A) because: higher interest = more expensive to borrow thus they hold less money and have less to spendnot C) because higher interest = more expensive to borrow thus they do not hold more cash as a result of higher interestnot D) because higher interest = higher reward from saving
