According to the intertemporal substitution effect, when the price level increases, the interest rate
A) rises and the quantity of real GDP demanded increases.
B) rises and the quantity of real GDP demanded decreases.
C) falls and the quantity of real GDP demanded decreases.
D) is not affected.
B
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In the short run, a decrease in the price level: a. decreases output prices relative to input prices. b. increases the profit margins of many producers. c. decreases RGDP supplied
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