The Interest Rate Effect Suggests That the Negative Slope of the Aggregate

question 2

Multiple Choice

The interest rate effect suggests that the negative slope of the aggregate demand curve results in part because changes in the price level affect

• A)domestic purchases of foreign goods.
• B)the demand for money by households and firms.
• C)the real purchasing power of household wealth.
• D)the level of income.

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Definitions:

Endorphins

Naturally occurring peptides in the brain that act as neurotransmitters to reduce the perception of pain and can induce feelings of pleasure or euphoria.

Glial Cells

Non-neuronal cells in the nervous system that support, protect, and provide a scaffold for neurons.

Myelin

A fatty substance that wraps around neurons, increasing the speed at which electrical impulses are passed along the nerve cells.

Neurotransmitters

Chemicals that transmit signals across a synapse from one neuron to another in the brain and nervous system.