The Interest-Rate Effect

question 189

Multiple Choice

The interest-rate effect

• A)depends on the idea that decreases in interest rates increase the quantity of goods and services demanded.
• B)depends on the idea that decreases in interest rates decrease the quantity of goods and services demanded.
• C)is responsible for the downward slope of the money-demand curve.
• D)is the least important reason,in the case of the United States,for the downward slope of the aggregate-demand curve.

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Definitions:

Cow Feed

Materials fed to cattle, including grass, grains, and sometimes supplements, to maintain or improve health and production.

Consumption

The action of using goods and services to satisfy needs or wants.

Consumption

The act of using goods and services by households, which is a primary component in measuring gross domestic product (GDP) in economics.

Consumer's Surplus

The disparity between what consumers are prepared and can afford to spend on a product or service and the actual amount they end up paying.