Business, 18.01.2020 05:31 pizarroisaid

Which of the following factors would be most likely to lead to an increase in nominal interest rates?

1. households reduce their consumption and increase their savings.
2. a new technology like the internet has just been introduced, and it increases investment opportunities.
3. there is a decrease in expected inflation.
4. the economy falls into a recession.
5. the federal reserve decides to try to stimulate the economy.

Answers: 1

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Answers

The answers is: 3. A new technology like the Internet has just been introduced, and it increases investment opportunities.

Explanation:

Given there is higher demand for investment opportunities, borrowers in the economy will compete for funding while there is no change in the supply of funding, moreover, inflation rate has been constant which will finally lead to the increase in nominal interest rates.

1. Households reduce their consumption and increase their savings is not correct because higher saving will decrease interest rate as there is higher supply of funding.

2. There is a decrease in expected inflation is not correct as nominal interest rate is most likely to go down to keep real interest rate constant.

4. The economy falls into a recession is not correct as the situation will stimulate more saving and less consumption, less investment. Moreover, the Central Bank may also implement loose monetary policy which will decrease Nominal Interest rate.

5. The Federal Reserve decides to try to stimulate the economy is not correct as Federal Reserve will inject money into the economy, subsequently, nominal interest rate will go down.

Answer from: Quest

answer; (c) run the name by everyone you can;

Answer from: Quest

the correct answer would be b, when, queen, calder hall and london.

explanation:

we always capitalize words when a paragraph or sentence is starting, when an important name is used, when a place is being written, or simply when a noun is used, etc. so in this sentence, sentence is starting from 'when', so it will be written in capital letters. secondly, queen is considered to be an important person, so it will also be written in capital letter. next, the name of the town is mentioned, i-e calder hall, which will also be written in capital letters. in the last, city name is being used, 'london', which will also be written in capital letters. so option b is the most appropriate one.

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Which of the following factors would be most likely to lead to an increase in nominal interest rates...

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