The Interest-Rate Effect

Multiple Choice

The interest-rate effect

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