We said in class that when prices rise (as in inflation), nominal interest rates tend to These rise ㅁ higher rates make it more expensive to borrow, so this explains in part why [ Select ] ㅁ
We said in class that when prices rise (as in inflation), nominal interest rates tend to These rise ㅁ higher rates make it more expensive to borrow, so this explains in part why [ Select ] ㅁ
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:the AS curve is vertical at
full-employment output
the AS curve slopes
upward in the short run
the AD curve is vertical in
the long run
the AD curve slopes
downward (no matter the
time frame)
=
r
E
![We said in class that when prices rise (as
in inflation), nominal interest rates tend to
These
rise
higher rates make it more expensive to
borrow, so this explains in part why
[ Select]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6a7c72bb-8430-412c-8547-87bb6620a893%2F671e3329-6989-4220-9523-dfae95fa85a3%2Fuaogv6w_processed.jpeg&w=3840&q=75)
Transcribed Image Text:We said in class that when prices rise (as
in inflation), nominal interest rates tend to
These
rise
higher rates make it more expensive to
borrow, so this explains in part why
[ Select]
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