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Explain How an Increase in the Price Level Changes Interest

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Essay

Explain how an increase in the price level changes interest rates. How does this change in interest rates lead to changes in investment and net exports?


Definitions:

Pleura

Thin layers of tissue that line the lungs and the inside of the chest cavity, providing lubrication necessary for the lungs to move smoothly during breathing.

Thorax

The chest cavity.

Vital Capacity

The maximum amount of air a person can expel from the lungs after a maximum inhalation.

Expiratory Reserve Volume

The maximum volume of air that can be forcibly exhaled after a normal exhalation.

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