Which of the Following Properly Describes the Interest-Rate Effect of Aggregate

question 67

Multiple Choice

Which of the following properly describes the interest-rate effect of aggregate demand?

• A) A higher price level leads to higher money demand, higher money demand leads to higher interest rates, a higher interest rate increases the quantity of goods and services demanded.
• B) A higher price level leads to higher money demand, higher money demand leads to lower interest rates, a higher interest rate reduces the quantity of goods and services demanded.
• C) A lower price level leads to lower money demand, lower money demand leads to lower interest rates, a lower interest rate reduces the quantity of goods and services demanded.
• D) A lower price level leads to lower money demand, lower money demand leads to lower interest rates, a lower interest rate increases the quantity of goods and services demanded.

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Definitions:

Incentive

A reward or benefit offered to individuals or groups to motivate specific actions or behaviors.

Training

The process of enhancing the skills, capabilities, and knowledge of employees for the effective execution of their responsibilities.

Managerial Competence

The combination of skills, knowledge, and ability that enables a manager to effectively perform their duties and lead their team or organization.

Social Standing

The perceived rank or status of an individual or group within a social hierarchy.