In order for the aggregate demand (AD) curve to be downward-sloping,
A) there has to be an inverse relationship between the real interest rate and real GDP and a positive relationship between inflation and the real interest rate.
B) there has to be a positive relationship between the real interest rate and real GDP and a negative relationship between inflation and the real interest rate.
C) there has to be an inverse relationship between the real interest rate and real GDP and an inverse relationship between inflation and the real interest rate.
D) there has to be a positive relationship between the real interest rate and real GDP and a positive relationship between inflation and the real interest rate.
E) there has to be an inverse relationship between the real interest rate and real GDP but there cannot be a relationship between inflation and the real interest rate.
Correct Answer:
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Q1: The economic fluctuations model is used
A)for all
Q2: The best way to approach the debate
Q4: Exhibit 24-1 Q5: Since inflation tends to rise when the Q6: The real rate of interest is Q7: According to the aggregate demand curve, there Q8: The economic fluctuations model is used to Q9: The economic fluctuations model is older than Q10: When interest rates increase, Q11: When interest rates decrease,
A)the difference
A)government purchases will increase
A)investment will decrease, and
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