What Will Happen to the Equilibrium Interest Rate When Both

question 55

Multiple Choice

What will happen to the equilibrium interest rate when both money supply and nominal aggregate output decrease?

• A)The equilibrium interest rate increases.
• B)The equilibrium interest rate decreases.
• C)The equilibrium interest rate remains constant.
• D)The impact on the equilibrium interest rate is ambiguous.

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Definitions:

Retina

Nervous tunic of the eyeball.

Lacrimal Gland

Tear gland located in the superolateral corner of the orbit.

Mitral Cells

Neurons in the olfactory bulb that receive signals from the sensory neurons and transmit them to other parts of the brain for odor processing.

Taste Buds

Sensory organs located on the tongue that enable the perception of different flavors such as sweet, salty, bitter, and sour.