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Author Question: The interest rate effect that helps explain the slope of the aggregate demand curve arises because ... (Read 23 times)

abc

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on: Jun 30, 2018
The interest rate effect that helps explain the slope of the aggregate demand curve arises because
 
  A) an increase in the price level lead to decreases in interest rates, which induces more borrowing and hence raises planned real expenditures.
  B) interest rates and total planned real expenditures are unrelated.
  C) an increase in the price level boosts interest rates, which discourages borrowing and hence reduces planned real expenditures.
  D) a decrease in the price level boosts interest rates, which discourages borrowing and hence frees up income for more planned real expenditures.

Question 2

Regarding the role of saving in economic growth, studies indicate that
 
  A) there is both a positive and a negative relationship between economic growth and saving.
  B) there is a positive relationship between economic growth and saving.
  C) there is a negative relationship between economic growth and saving.
  D) there is no relationship between economic growth and saving.


jessofishing

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Reply #1 on: Jun 30, 2018
Answer to Question 1

C

Answer to Question 2

B


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