If Inflation Is Expected to Increase,this May Cause

question 73

Multiple Choice

If inflation is expected to increase,this may cause:

• A) interest rates to rise.
• B) the demand for loanable funds to fall.
• C) the supply of loanable funds to increase.
• D) interest rates to fall.

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Definitions:

Passive Approach

A strategy or method in various contexts, including investing or policy-making, that involves minimal or no intervention.

Aggregate Supply Curve

Represents the total supply of goods and services that firms in an economy plan to sell during a specific time period at different price levels, usually upward sloping, indicating a positive relationship between price level and output.

Aggregate Demand Curve

represents the total demand for all goods and services in an economy at different price levels, typically downward sloping.

Prices

The amount of money required to purchase goods or services, representing the value placed on those items.