Which of the Following Properly Describes the Interest-Rate Effect That

question 205

Multiple Choice

Which of the following properly describes the interest-rate effect that helps explain the slope of the aggregate-demand curve?

• A)As the money supply increases, the interest rate falls, so spending rises.
• B)As the money supply increases, the interest rate rises, so spending falls.
• C)As the price level increases, the interest rate falls, so spending rises.
• D)As the price level increases, the interest rate rises, so spending falls.

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Definitions:

Accord and Satisfaction

A legal settlement where a debtor offers payment or performance different from what was originally agreed, and the creditor accepts it as full settlement of the debt.

UCC

A complete collection of legal regulations that administer all business dealings across the United States, known as the Uniform Commercial Code.

Preexisting Duty

A promise to do something that one is already obligated to do. It is not considered valid consideration.

Unforeseen Circumstances

Events or situations that could not have been predicted and often cause a change in plans or necessitate a response.