Multiple Choice
Which of the following statements is correct?
A) The long-run real interest rate varies directly with changes in non-interest sensitive components of aggregate demand and inversely with potential output.
B) The long-run real interest rate varies inversely with changes in non-interest sensitive components of aggregate demand and inversely with potential output.
C) The long-run real interest rate varies directly with changes in non-interest sensitive components of aggregate demand and directly with potential output.
D) The long-run real interest rate varies directly with changes in non-interest sensitive components of aggregate demand and does not vary with potential output.
Correct Answer:
Verified
Correct Answer:
Verified
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