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Consider an Exogenous Increase in the Real Interest Rate in the Simple

Question 35

Multiple Choice

Consider an exogenous increase in the real interest rate in the simple macro model.This will tend to cause ________ in desired consumption and ________ in desired investment.


A) an increase; an increase
B) an increase; a decrease
C) a decrease; a decrease
D) a decrease; no change
E) a decrease; an increase

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