Question

If the interest rate rises, what will happen to overall employment levels in sectors affected by those interest rates?

a.employment levels will increase
b.employment levels will not be affected
c.employment levels will decrease

Answer 1

c. employment levels will decrease

Step-by-step explanation:

As interest rates move up, the cost of borrowing becomes more expensive. This means that demand for lower-yield bonds will drop, causing their price to drop.