If the domino effect occurs as a result of changes in the money supply, what will most likely happen as an immediate result of interest rates being increased? borrowing will decrease. investing will decrease. inflation will increase. liquidity will increase

The Domino Effect, even considering the nature of the name, will make all go through the same situation, one after the other. Considering that is the case, having the money supply being changed as a result of increased rates, we can say that there won't be the same amount of money available in the near future, meaning that borrowing will decrease.

B) Increase in Borrowing.

Further Explanation:-

The cost which an individual pays is known as Interest rate. It can be also termed as the compensation for the service as well as risk of lending money. This keeps economy moving and encourages people to borrow, to lend as well as to spend.  

The interest rates always keep on changing as there are different forms of loans which have different interest rates. It is the money lender to takes the risk as the risk is of that the borrower may not repay the loan back. So, because of this very reason interests were introduced as interests provide a certain compensation to bear a risk. It is doubled with regards to the risk of default as well as risk of inflation.

For example, when someone is borrowing some money, the price of the goods may increase during the time of repayment as that will bring purchasing power of the money down. So, because of this, Interest protects against the probability of future rises in borrowing.  

Learn more:

1. Which would most likely fall under the original jurisdiction of the supreme court?

2. Why did Nazi Germany build concentration camps in Poland?

3. The believed in a loose construction of the constitution?

Answer Details:

Grade – High School

Subject – Economy

Chapter – Domino Effect

Keywords –Domino Effect, Probability, Inflation, Economy, Borrow, Interest, Risk, Borrower, Loan, Lender.

the answer is b your welcome : )

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