Solve the question of Miscellaneous and select the option from the choices A through D/E. Check your Answer and view the explanation.
Question: 1
Which among the following statements is not true when there is an increase in interest rate in an economy?
- increase in saving
- decrease in loan
- increase in production cost
- increase in capital return
Show/Hide Explanation
Correct Answer: D
None
Sol. Interest rate increase the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate environment, shares become a more attractive buy, raising households’ financial assets.