Multiple Choice
Which of the following best describes the "interest rate effect"?
A) An increase in the price level raises the interest rate and chokes off government spending.
B) An increase in the price level lowers the interest rate and chokes off government spending.
C) An increase in the price level raises the interest rate and chokes off investment and consumption spending.
D) An increase in the price level lowers the interest rate and chokes off investment and consumption spending.
Correct Answer:
Verified
Correct Answer:
Verified
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