The Interest-Rate Effect Suggests That

question 305

Multiple Choice

The interest-rate effect suggests that

• A) a decrease in the supply of money will increase interest rates and reduce interest-sensitive consumption and investment spending.
• B) an increase in the price level will increase the demand for money, reduce interest rates, and decrease consumption and investment spending.
• C) an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending.
• D) an increase in the price level will decrease the demand for money, reduce interest rates, and increase consumption and investment spending.

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Definitions:

Gastrocnemius

A major calf muscle that flexes the knee and aids in the plantar flexion of the foot.

Biceps Brachii

A muscle of the upper arm that functions to flex the elbow and rotate the forearm, comprised of two heads.

External Oblique

A muscle located in the abdomen that helps in rotating the trunk and flexing the spine.

External Oblique

A muscle located on the lateral and anterior parts of the abdomen, involved in the movement and support of the trunk.