Changing the overnight rate affects aggregate demand through several channels. Check all Select all that apply: a. Lower real interest rates raise consumption expenditure. Ob. Higher real interest rates raise consumption expenditure.
Changing the overnight rate affects aggregate demand through several channels. Check all Select all that apply: a. Lower real interest rates raise consumption expenditure. Ob. Higher real interest rates raise consumption expenditure.
Chapter11: Managing Aggregate Demand: Fiscal Policy
Section: Chapter Questions
Problem 2TY
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Transcribed Image Text:Changing the overnight rate affects aggregate demand through several channels. Check all
Select all that apply:
a. Lower real interest rates raise consumption expenditure.
O b. Higher real interest rates raise consumption expenditure.
c.
Lower real interest rates raise investment spending.
Od. Higher real interest rates raise the exchange rate and lower net exports.
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