An increase in the real risk free interest rate causes its:
a. Aggregate demand to fall, the average price level to fall, and real GDP to rise.
b. Aggregate supply to rise, the average price level to rise, and real GDP to rise.
c. Aggregate demand to rise, the average price level to rise, and real GDP to rise.
d. Aggregate supply to fall, the average price level to rise, and real GDP to fall.
e. Aggregate demand to fall, the average price level to fall, and real GDP to fall.
.E
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Total income in a country in 2012 is $780 billion. Total expenditure in the country
A) cannot be determined. B) is greater than $780 billion. C) is $780 billion. D) is less than $780 billion. E) is either less than or equal to $780 billion.
Why is health considered a consumption good and a form of human capital?
What will be an ideal response?
Inflation has no effect on an economy's well-being if
A) it is universally and accurately anticipated. B) relative prices are unaffected. C) the nominal rate of interest for both savers and borrowers rises by an amount just equal to the rate of inflation. D) all of these
In Figure 3-7 above, the multiplier effect does NOT explain
A) the increase in equilibrium income. B) the increase in induced saving. C) the increase in AP. D) all of the above.