Pam needs to borrow money to start a business. Suppose that the saving rate in the country is expected to increase. Assuming nothing else changes, this means that if Pam borrows now, her cost of borrowing money is expected to __________ due to the following factor:

a) Increasing preferences for future consumption.

b) Rising interest rates.

c) Decreasing preferences for future consumption.

----------------------------

Which of the following events could increase the cost of money? Check all that apply.

-The federal deficit increases

-The Federal Reserve purchases Treasury securities held by banks

I-nflation declines

-Inflation rise