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:

Pupil

The black circular opening in the iris of the eye, which regulates the amount of light that enters the eye.

Iris

The colored part of the eye surrounding the pupil, controlling the amount of light that enters the eye by adjusting the size of the pupil.

Absolute Threshold

The minimum intensity of a stimulus that one can detect 50 percent of the time, a concept fundamental in sensory and perception studies.

Difference Threshold

The minimum difference in stimulation that a person can detect 50 percent of the time.