Figure 4.1 -In Figure 4.1, the Most Likely Cause of a Decrease

Multiple Choice

Figure 4.1
-In Figure 4.1, the most likely cause of a decrease in the equilibrium interest rate from i₂ to i₁ is

A) an increase in the expected inflation rate.
B) a decrease in the expected inflation rate.
C) a business cycle expansion.
D) a combination of both A and C of the above.