The Real Balance Effect (Wealth Effect), the Interest Rate Effect

question 85

Multiple Choice

The real balance effect (wealth effect) , the interest rate effect, and the net exports effect all help to explain the:

• A) decrease in supply in the loanable funds market.
• B) large federal budget deficit.
• C) increase in short-run aggregate supply.
• D) downward-sloping aggregate demand curve.

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Definitions:

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