Economics · May / June 2022 · Paper 11 · Question 18
2281Monetary policy
Why would an increase in the interest rate potentially lead to lower inflation?
- AConsumers will be more willing to save when interest rates are high.
- BConsumers will be more willing to spend when interest rates are high.
- CProducers will be more willing to borrow from banks when interest rates are high.
- DProducers will be more willing to invest when interest rates are high.
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Correct answer: A. Consumers will be more willing to save when interest rates are high.
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