According to the interest rate effect, an increase in the price level, if other factors are held constant, will lead to
A. a reduction in total real spending on interest-rate-sensitive goods.
B. an outward shift of the aggregate demand curve.
C. an increase in the real interest rate.
D. an increase in the stock of real wealth held by the public.
Answer: A
You might also like to view...
Isoquant lines represent ________ whereas isocost lines represent ________
A) technical efficiency; economic efficiency B) economic efficiency; technical efficiency C) economic efficiency; marginal costs D) input tradeoffs; economic tradeoffs
Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $12; AVC = $10; MC = $15; MR = $13. The firm should
A) decrease output. B) increase output. C) increase price. D) change nothing.
The multiplier effect states that there are additional shifts in aggregate demand from fiscal policy, because it
a. reduces investment and thereby increases consumer spending. b. increases the money supply and thereby reduces interest rates. c. increases income and thereby increases consumer spending. d. decreases income and thereby increases consumer spending.
In the United States in 2016, ________ of uninsured people live in families in which at least one member has a job
A) less than 12% B) about 38% C) more than 70% D) almost 98%