The Interest Rate Effect That Helps Explain the Slope of the Aggregate

question 202

Multiple Choice

The interest rate effect that helps explain the slope of the aggregate demand curve arises because

• A) interest rates and total planned real expenditures are unrelated.
• B) an increase in the price level lead to decreases in interest rates, which induces more borrowing and hence raises planned real expenditures.
• C) an increase in the price level boosts interest rates, which discourages borrowing and hence reduces planned real expenditures.
• D) a decrease in the price level boosts interest rates, which discourages borrowing and hence frees up income for more planned real expenditures.

---

Definitions:

Variables

Containers in programming that store data values which can be changed during the execution of a program.

Ragged Array

A ragged array, also known as a jagged array, is an array of arrays where subarrays can have different lengths, allowing for a non-uniform structure.

Different Number

A term that may refer to any numeric value that is distinct from others in a specified set or context.

Program Action

Refers to any operation or set of operations carried out by a program or software in the course of its execution.