Explain How an Increase in Real Interest Rates Affects the Components

question 33

Essay

Explain how an increase in real interest rates affects the components of aggregate expenditure.

---

Definitions:

Fronde

A series of civil wars in France between 1648 and 1653, characterized by complex alliances among the nobility, the parliament, and the French people, largely in opposition to royal absolutism and the growing centralization of power.

Nobles

Members of the highest social class in some societies, typically holding hereditary titles or offices.

Louis XIII

King of France from 1610 to 1643, whose reign saw the strengthening of royal power and the development of Absolutism in France, largely through the efforts of his minister, Cardinal Richelieu.