Everything else remaining the same, an increase in the interest rate increases saving and
A)increases aggregate demand through the international substitution effect.
B)decreases aggregate demand through the international substitution effect.
C)increases aggregate demand through the intertemporal substitution effect.
D)decreases aggregate demand through the intertemporal substitution effect.
E)increases aggregate demand through the wealth effect.

Question

Quizplus · Accepted Answer

The Answer of Everything else remaining the same, an increase in the interest rate increases saving and
A)increases aggregate demand through the international substitution effect.
B)decreases aggregate demand through the international substitution effect.
C)increases aggregate demand through the intertemporal substitution effect.
D)decreases aggregate demand through the intertemporal substitution effect.
E)increases aggregate demand through the wealth effect.

Everything Else Remaining the Same, an Increase in the Interest