A Change in Expectations About Future Prices by Consumers, Who

Multiple Choice

A change in expectations about future prices by consumers, who now believe that prices will be higher than they earlier thought, will eventually result in a(n)

A) increase in the interest rate
B) decrease in the interest rate
C) change in the interest rate but the direction of the change depends upon how much expectations changed
D) change in the market rate of interest but the equilibrium rate of interest remains unchanged
E) change in the equilibrium rate of interest but the market rate of interest remains unchanged