An increase in the nominal interest rate increases the quantity of credit card services because
A) bank profits go up.
B) of intertemporal substitution.
C) the opportunity cost of making transactions with money has risen.
D) the substitution effect is greater than the income effect.
C
You might also like to view...
Moral hazard results from ________ information and adverse selection results from ________ information
A) private; private B) private; public C) public; private D) public; public
The Fed can simultaneously reduce the inflation rate and stimulate growth through lowering interest rates
Indicate whether the statement is true or false
The duration of a coupon bond increases
A) the longer is the bond's term to maturity. B) when interest rates increase. C) the higher the coupon rate on the bond. D) the higher the bond price.
The organized groups of people who favor government intervention do so at the expense of other groups because even government resources are limited
Indicate whether the statement is true or false