By analyzing aggregate demand through its component parts, we can conclude that, everything else held constant, a decline in the inflation rate causes
A) an increase in real interest rates, an increase in investment spending, and a decline in aggregate output demand.
B) a decline in real interest rates, a decrease in investment spending, and an increase in aggregate output demand.
C) a decline in real interest rates, an increase in investment spending, and an increase in aggregate output demand.
D) an increase in real interest rates, a decline in investment spending, and a decline in aggregate output demand.
C
You might also like to view...
If marginal revenue exceeds marginal cost in the short run, total revenue for the perfectly competitive firm is greater than total cost
a. True b. False Indicate whether the statement is true or false
Stockholders normally obtain higher expected payments than bondholders because
A. they are required by law to obtain a higher return. B. they face higher risk. C. the profit share declared as stock dividends is not taxable. D. they vote themselves higher returns.