Question

Other things the same, when the price level falls, interest rates ____ (A) rise, which means consumers will want to spend more on homebuilding.(B) fall, which means consumers will want to spend less on homebuilding.(C) rise, which means consumers will want to spend less on homebuilding.(D) fall, which means consumers will want to spend more on homebuilding.

Answer 1

Answer:

The correct option here would be -D) interest rate would rise and people would want to spend more on home building.

Explanation:

In an economy , when the price levels falls , people usually hold less amount of money and they will spend more amount of money and all of this would lead to fall in the interest rates . Thus, we can say that when interest rate falls , people would more likely want to spend more on homer building.