Which interest rates is most relevant in determining aggregate expenditures?
A)federal funds rate
B)short-term real interest rate
C)long-term nominal interest rate
D)long-term real interest rate

Question

Quizplus · Accepted Answer

The long-term real interest rate is the most relevant in determining aggregate expenditures. This is because it reflects the cost of borrowing over a longer period of time and takes into account inflation. It affects investment decisions by businesses and households, which are important components of aggregate expenditures in the economy.

Which Interest Rates Is Most Relevant in Determining Aggregate Expenditures