Which of the Following Properly Describes the Interest-Rate Effect

question 79

Multiple Choice

Which of the following properly describes the interest-rate effect?

• A)A higher price level leads to higher money demand;higher money demand leads to higher interest rates;a higher interest rate increases the quantity of goods and services demanded.
• B)A higher price level leads to higher money demand;higher money demand leads to lower interest rates;a higher interest rate reduces the quantity of goods and services demanded.
• C)A lower price level leads to lower money demand;lower money demand leads to lower interest rates;a lower interest rate reduces the quantity of goods and services demanded.
• D)A lower price level leads to lower money demand;lower money demand leads to lower interest rates;a lower interest rate increases the quantity of goods and services demanded.

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Definitions:

Bases

Chemical substances that can accept hydrogen ions (H+) and are characterized by a pH greater than 7 when dissolved in water.

Hydrophilic

Describing molecules or substances that have a natural affinity for water and can dissolve in or absorb water easily.

Hydrophobic

A characteristic of molecules or substances that do not readily mix with or are repelled by water, often due to nonpolar characteristics.

Water Strider

An insect that can walk on the surface of water due to the high surface tension of water and the long, water-repellent legs of the insect.