John reads in a local newspaper that a decrease in the demand for money has resulted in a decrease in the interest rate. He realizes that this is the prime time to buy a car with low interest rates. Which of these factors is driving John's demand in this example?

a. The interest rate effect
b. The exchange rate effect
c. The wealth effect
d. The accelerator effect

a

Economics

You might also like to view...

The guiding function of price is

A) the movement of price to clear the market of any shortages or surpluses. B) the use of price as a signal to guide government on the use of market subsidies. C) a long-run function resulting in the movement of resources into or out of markets. D) the movement of price as a result of changes in the demand for a product.

Economics

Which of the following does NOT cause a shift in demand?

A) change in income B) change in tastes C) change in the price of the good D) change in the price of a related good

Economics