Interest rates in the economy have risen. How will this affect aggregate demand and equilibrium in the short run?
A) Aggregate demand will rise, the equilibrium price level will fall, and the equilibrium level of GDP will rise.
B) Aggregate demand will rise, the equilibrium price level will rise, and the equilibrium level of GDP will rise.
C) Aggregate demand will fall, the equilibrium price level will fall, and the equilibrium level of GDP will fall.
D) Aggregate demand will fall, the equilibrium price level will rise, and the equilibrium level of GDP will fall.
C
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The inability of wages to adjust to market conditions is called ________
Fill in the blank(s) with correct word
The above figure shows a perfectly competitive firm. If the market price is $15 per unit, the firm
A) will definitely shut down to minimize its losses. B) will stay open to produce and will make zero economic profit. C) will stay open to produce and will incur an economic loss. D) will stay open to produce and will make an economic profit. E) might shut down but more information is needed about the fixed cost.
During the financial crisis of 2007-2009,
A) mortgage-backed securities became more liquid. B) information costs of mortgage-backed securities rose. C) information costs of mortgage-backed securities declined. D) the tax treatment of mortgage-backed securities was changed.
The "lemons" problem is that
a. cars of verifiable high quality are withheld from the used car market b. cars of verifiable low quality are withheld from the used car market c. cars of unverifiable high quality are withheld from the used car market d. cars of unverifiable low quality are withheld from the used car market