If Real Interest Rates Increase, the Expenditure Line

question 38

Multiple Choice

If real interest rates increase, the expenditure line

• A)does not change.
• B)becomes steeper.
• C)becomes flatter.
• D)shifts down in a parallel way.
• E)shifts up in a parallel way.

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Definitions:

Rate Of Exchange

The worth of one currency when converted into another.

Pound

The currency unit of the United Kingdom, also known as the pound sterling, symbolized by £.

Dollar

A unit of currency used in the United States and other countries, symbolized by $.

Net Investment Income

Income received from investment assets (like shares or bonds) minus fees, costs, and taxes associated with the investment.