The Interest-Rate Effect

Multiple Choice

The interest-rate effect

A) depends on the idea that increases in interest rates decrease the quantity of goods and services demanded.
B) depends on the idea that increases in interest rates decrease the quantity of goods and services supplied.
C) is responsible for the downward slope of the money-demand curve.
D) is the least important reason, in the case of the United States, for the downward slope of the aggregate-demand curve.