The Interest Rate Effect Shows That If the Price Level

Multiple Choice

The interest rate effect shows that if the price level increases

A) consumers and businesses will increase their spending to buy the same amount of goods as before to make up for the higher interest rates.
B) consumers and businesses will decrease their spending as the interest rate increases, thereby pushing up the cost of acquiring funds.
C) U.S. exports and imports will both decrease.
D) the real value of financial assets will increase.