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  3. Study Set
    Principles of Economics
  4. Exam
    Exam 34: The Influence of Monetary and Fiscal Policy on Aggregate Demand
  5. Question
    If an Increase in Interest Rates Reduces Investment Spending by $25m
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If an Increase in Interest Rates Reduces Investment Spending by $25m

Question 1

Question 1

Multiple Choice

If an increase in interest rates reduces investment spending by $25m:


A) real GDP will decrease by $25 million
B) GDP will decrease by $25 million
C) GDP will decrease by more than $25 million
D) GDP will decrease by less than $25 million x

Correct Answer:

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