If the Fed changes the interest rate, there will be
a. a movement along the aggregate expenditure line followed by a shift in the line
b. no movement along the aggregate expenditure line because the effect is on investment
c. a shift in the aggregate supply curve
d. an increase in the money supply
e. a shift in the aggregate expenditure line
E
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Caroline is an artist. She purchases canvas, paints, brushes, and accessories for $75. She sells one of her original paintings to an art gallery for $1,500, even though an art lover would pay $4,500 for that painting
How much value does Caroline add? A) $75 B) $1,425 C) $1,500 D) $4,425
An automobile manufacturer voluntarily recalls certain models to fix a defective part at no cost to the owners. This action has the effect of
A) the lemon problem. B) a manufacturer's warranty. C) a market failure. D) none of the above