Everything Else Remaining the Same, an Increase in the Interest

question 43

Multiple Choice

Everything else remaining the same, an increase in the interest rate increases saving and

• A)increases aggregate demand through the international substitution effect.
• B)decreases aggregate demand through the international substitution effect.
• C)increases aggregate demand through the intertemporal substitution effect.
• D)decreases aggregate demand through the intertemporal substitution effect.
• E)increases aggregate demand through the wealth effect.

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Definitions:

Convincing Arguments

Persuasive reasoning or evidence presented in a way that effectively incites belief or action in the listener or reader.

Positive Transfer

The process by which learning in one context or with one set of materials enhances learning in another context or with another set of materials.

Learning

The process of acquiring new knowledge, behaviors, skills, values, or preferences through experience or education.

Misinformation Effect

Occurs when misleading information has corrupted one’s memory of an event.