Suppose Interest Rates Increase from 1 Percent to 3 Percent

question 87

Multiple Choice

Suppose interest rates increase from 1 percent to 3 percent.In the short run,one can expect output in the United States to ________ and the price level to ________.

• A) increase; increase
• B) decrease; decrease
• C) decrease; increase
• D) increase; decrease
• E) remain unchanged; remain unchanged

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Definitions:

Captain Alfred T. Mahan

A United States Navy officer and historian whose theories on the importance of naval power influenced naval strategies worldwide in the late 19th and early 20th centuries.

Strong Navy

Refers to a nation's strategic and operational emphasis on developing and maintaining a powerful maritime force for defense and projection of power.

Democratic Principles

Fundamental beliefs and practices that support democracy, including the rule of law, equal rights, freedom of speech, and the participation of citizens in political decision-making.

Hawai'i's Annexation

The process by which the Hawaiian Islands were annexed by the United States in 1898, marking the end of the Hawaiian monarchy and beginning of Hawaii's transition into a U.S. territory.