A Rise in the Real Interest Rate Will Cause Which

question 47

Multiple Choice

A rise in the real interest rate will cause which of the components of aggregate demand to decline?

• A)Only C
• B)Only C and I
• C)Only C, I, and NX
• D)C, I, G, and NX

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Definitions:

Household Budget

An estimate of an individual's or family's income and expenses over a specified period, used for managing personal finances.

Economic Theory

A set of principles and concepts used to explain how economies operate and to make predictions about economic behaviors and outcomes.

China

A country in East Asia, known as the world's most populous nation with a continuous culture stretching back nearly 4,000 years.

United States

The United States is a country in North America, known for its significant influence on global economic, political, and cultural affairs.