The Interest-Rate Effect

question 64

Multiple Choice

The interest-rate effect

• A)depends on the idea that increases in interest rates increase the quantity of money demanded.
• B)depends on the idea that increases in interest rates increase the quantity of money supplied.
• C)is the most important reason,in the case of the United States,for the downward slope of the aggregate-demand curve.
• D)is the least important reason,in the case of the United States,for the downward slope of the aggregate-demand curve.

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Definitions:

Acetylene

A colorless, flammable gas used as a fuel and a building block for chemical synthesis.

Molecular Shape

The three-dimensional arrangement of atoms within a molecule, determining its reactivity, polarity, and physical properties.

Linear

Describes a structure, process, or mathematical function that proceeds or is arranged in a straight line or sequence.

Phosphine

A toxic, colorless, flammable gas with the chemical formula PH3, used in the semiconductor industry and as a pesticide.