(Interest Rate, Planned investment in billions): (3%,$400) (6%,$360), (9%, $320), (12%, $280), (15%, $240), (18%, $200): Suppose the expenditure multiplier is 3. An increase in the interest rate from 6% to 9%, ceteris paribus, would
A) increase planned expenditure by $120 billion.
B) increase aggregate expenditure by $120 billion.
C) decrease equilibrium output by $120 billion.
D) decrease planned investment by $120 billion.
Answer: C) decrease equilibrium output by $120 billion.
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