The Reserve Bank increases interest rates to reduce the level of spending in the economy.As the rate of growth in economic activity slows,the demand for funds also slows.This impact of a change in interest rates is described as the:
A) inflation effect.
B) liquidity effect.
C) income effect.
D) monetary effect.

Question

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The Answer of The Reserve Bank increases interest rates to reduce the level of spending in the economy.As the rate of growth in economic activity slows,the demand for funds also slows.This impact of a change in interest rates is described as the:
A) inflation effect.
B) liquidity effect.
C) income effect.
D) monetary effect.

The Reserve Bank Increases Interest Rates to Reduce the Level