Author Question: Interest rates in the economy have risen. How will this affect aggregate demand and equilibrium in ... (Read 71 times)

rl · **on:** Jun 29, 2018

Interest rates in the economy have risen. How will this affect aggregate demand and equilibrium in the short run?

A) Aggregate demand will rise, the equilibrium price level will fall, and the equilibrium level of GDP will rise.
B) Aggregate demand will fall, the equilibrium price level will rise, and the equilibrium level of GDP will fall.
C) Aggregate demand will fall, the equilibrium price level will fall, and the equilibrium level of GDP will fall.
D) Aggregate demand will rise, the equilibrium price level will rise, and the equilibrium level of GDP will rise.

Question 2

Which of the following would decrease the current account balance of the United States?

A) a decrease in the amount of money the U.S. government sends in foreign aid to other countries
B) a decrease in imports
C) a decrease in the amount of income U.S. companies pay out to foreigners who own investments in the U.S.
D) a decrease in the balance of trade