Which Interest Rate Is Most Relevant in Determining Aggregate Expenditures

question 43

Multiple Choice

Which interest rate is most relevant in determining aggregate expenditures?

• A) federal funds rate
• B) short-term real interest rate
• C) long-term nominal interest rate
• D) long-term real interest rate

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Definitions:

Factors Of Production

Factors employed in the creation of goods or services with the aim of generating economic profit encompass land, labor, capital, and entrepreneurship.

Circular-Flow Diagram

A model that illustrates the movement of resources, goods, services, and money between households and firms in an economy.

Factors Of Production

The resources used in the production of goods and services, typically classified into four groups: land, labor, capital, and entrepreneurship.

Labor

Tasks undertaken by individuals that aid in generating goods and services within an economy.