An Increase in the Real Interest Rate

question 162

Multiple Choice

An increase in the real interest rate

• A)causes the nongovernment share of GDP line to shift to the right.
• B)causes the nongovernment share of GDP line to shift to the left.
• C)causes a downward movement along the nongovernment share line.
• D)causes an upward movement along the nongovernment share line.
• E)has an indeterminate effect on nongovernment expenditures since some nongovernment expenditures are positively related to the interest rate while others exhibit a negative relationship.

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Definitions:

Black Pigment

A substance that gives a dark color to materials, often used in cosmetics, art, and the natural coloration of organisms.

Vertebrate Eyes

The specialized organ in vertebrates that allows for the perception of vision, consisting of structures such as the cornea, iris, lens, and retina.

Retina

The light-sensitive layer of tissue at the back of the eye that captures images and sends visual information to the brain.

Light Sensitive

Refers to an organism or material that reacts to or is affected by the presence or intensity of light.