Changes in the Interest Rate

question 62

Multiple Choice

Changes in the interest rate

• A)shift aggregate demand whether they are caused by changes in the price level or by changes in fiscal or monetary policy.
• B)shift aggregate demand if they are caused by changes in the price level, but not if they are caused by changes in fiscal or monetary policy.
• C)shift aggregate demand if they are caused by fiscal or monetary policy, but not if they are caused by changes in the price level.
• D)do not shift aggregate demand.

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Definitions:

Purely Competitive Firm

A company operating in a market with many buyers and sellers, where no single entity can influence the price of its product.

Total Revenues

The overall revenue a business secures from its goods or service transactions, before removing any spending.

Fixed Costs

Costs that do not vary with the level of output produced, such as rent, salaries, and insurance premiums.

Optimal Level

The best or most efficient point at which a particular action or operation achieves a balance between benefits and costs.