When the Price Level Declines

question 76

Multiple Choice

When the price level declines

• A) the interest rate rises, and consumers borrow fewer funds, which causes a movement up the aggregate demand curve.
• B) the interest rate falls, and consumers borrow more funds, which causes a movement down along the aggregate demand curve.
• C) the interest rate is not affected, so there is no movement along the aggregate demand curve.
• D) interest rates fall, and consumers borrow more funds, which causes the aggregate demand curve to shift to the left.

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