Which One of the Following Factors Will Most Likely Cause

question 70

Multiple Choice

Which one of the following factors will most likely cause an increase in aggregate demand?

• A) an increase in the expected inflation rate
• B) an increase in the real interest rate
• C) a decrease in net exports due to falling incomes abroad
• D) a technological development that decreases the cost of producing computer chips

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, reflectively the interest payments due on any type of debt.

Face Value

The nominal value printed on a bill, bond, ticket, or other document, representing its value at issuance and/or redemption.

Effective-Interest Method

A method used in finance to systematically allocate the interest expense or income over the life of a financial asset or liability.

Interest Period

The span of time over which interest is calculated and charged on loans or investments.