By analyzing aggregate demand through its component parts, we can conclude that, everything else held constant, a decline in the inflation rate causes
A) an increase in real interest rates, an increase in investment spending, and a decline in aggregate output demand.
B) a decline in real interest rates, a decrease in investment spending, and an increase in aggregate output demand.
C) a decline in real interest rates, an increase in investment spending, and an increase in aggregate output demand.
D) an increase in real interest rates, a decline in investment spending, and a decline in aggregate output demand.
C
You might also like to view...
The principle of voluntary exchange is based on the idea of
A) making assumptions. B) rational self-interest. C) thinking at the margin. D) isolating variables.
The incentive to collect information is undermined by the ________
A) opportunity cost of collecting information B) asymmetric character of information flows C) free rider problem D) Willamette effect
In spring 2008, the U.S. Congress proposed to tax oil companies because of their near-monopoly status. This could have the unintended consequence of
A) increasing the equilibrium price by more than the tax. B) destroying the oil companies and leaving the United States without oil. C) increasing the profit of the best oil company. D) decreasing the power of the U.S. Congress.
An example of barter is voluntary work at an old-age home
a. True b. False Indicate whether the statement is true or false