Which of the Following Is an Example of the Interest-Rate

question 16

Multiple Choice

Which of the following is an example of the interest-rate effect,assuming the U.S.price level decreases?

• A) The purchasing power of money decreases and people buy more goods
• B) U.S.goods are more expensive for foreigners to buy and exports decrease
• C) U.S.production costs increase and producers charge higher prices
• D) The demand for loans decreases so interest rates decline and loan-financed purchases increase