Interest Rates in the Economy Have Fallen

question 69

Multiple Choice

Interest rates in the economy have fallen.How will this affect aggregate demand and equilibrium in the short run?

• A)Aggregate demand will rise,the equilibrium price level will rise,and the equilibrium level of GDP will rise.
• B)Aggregate demand will rise,the equilibrium price level will fall,and the equilibrium level of GDP will rise.
• C)Aggregate demand will fall,the equilibrium price level will fall,and the equilibrium level of GDP will fall.
• D)Aggregate demand will fall,the equilibrium price level will rise,and the equilibrium level of GDP will fall.

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Definitions:

Total Assets

The sum of all assets owned by an entity, including cash, investments, property, and other tangible and intangible assets, reflecting the company's overall value.

Equity Trusts

Investment funds that pool money from investors to purchase a diversified portfolio of equities, or stocks, managed by a professional fund manager.

Mortgage Trusts

Investment vehicles that pool mortgage loans and issue shares to investors, who receive dividends from the interest and principal payments made by borrowers.

REITs

Real Estate Investment Trusts, companies that own, operate, or finance income-generating real estate, allowing investors to invest in large-scale real estate properties.