If the interest rate on student loans ________, students will ________

A) falls from 6 percent to 1 percent; not change their saving but will change their investment
B) rises from 6 percent to 12 percent; increase their consumption before it becomes too expensive
C) rises from 6 percent to 12 percent; increase their saving in order to pay back the loan sooner
D) falls from 6 percent to 1 percent; increase their saving in order to pay back the loan sooner
E) None of the above answers is correct.


C

Economics

You might also like to view...

In monopolistic competition, an increase in a firm's advertising

A) has no effect on its average cost curves. B) has no effect on demand. C) increases the firm's average total cost. D) increases the firm's marginal cost.

Economics

If the spending multiplier equals 5 and equilibrium income is $2 billion below potential GDP, then _____ to reach the potential real GDP level

a. total spending needs to increase by $0.1 billion b. nominal GDP needs to increase by $1.2 billion c. total spending needs to decrease by $6 billion d. nominal GDP needs to decrease by $12 billion e. total spending needs to increase by $0.4 billion

Economics

The graphical device that illustrates the concept of scarce resources being efficiently utilized in the economy is a(n)

a. budget line. b. indifference curve. c. production possibilities frontier. d. marginal cost curve.

Economics

Which of the following is a question answered with positive economic analysis?

A. Should the college reduce tuition for out-of-state residents? B. Should the college charge higher tuition for part-time students? C. If the college increased its eligibility requirements for enrollment, will class sizes decline? D. Should the college eliminate its athletic program to cut its costs?

Economics