The Interest Rate Effect Is the Tendency for Changes in the Price

question 73

Multiple Choice

The interest rate effect is the tendency for changes in the price level to affect:

• A) the quantity of investment demanded and thus interest rates.
• B) export demand and thus aggregate demand.
• C) interest rates and thus the quantity of investment spending and consumption.
• D) real incomes and lead to shifts in potential output.

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A mental shortcut that relies on immediate examples that come to a person's mind when evaluating a specific topic, concept, method, or decision.

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