Solved

According to Keynes, When the Price Level Rises, It Causes

Question 13

Multiple Choice

According to Keynes, when the price level rises, it causes the interest rate to do what? It causes the level of business spending to do what?


A) It causes an increase in the interest rate, due to a greater consumer demand for money to spend; business spending decreases.
B) It causes an increase in the interest rate, due to greater consumer demand for money to spend; business spending goes up as well.
C) It causes a decrease in the interest rate, as people adjust to higher prices and purchase less; business spending decreases as well.
D) It causes a decrease in the interest rate, as people adjust to higher prices and purchase less; business spending goes up.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents