According to the interest rate effect, as the price level decreases, households and firms' holdings of money ____, interest rates ____, investments ____, and the quantity RGDP demanded ____.
a. increases, decrease, increase, decreases
b. increases, increase, increase, decreases
c. decreases, decrease, increase, increases
d. increases, increase, decrease, decreases
Question 2
The equilibrium level of income will rise when:
a. planned consumption spending is less than real GDP.
b. taxes exceed saving.
c. supply exceeds demand.
d. planned inventory investment is negative.
e. aggregate expenditures exceed real GDP.
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AAC, Inc. is planning to issue $5,000,000 in 180-day maturity notes paying a rate of 12 percent ...