Which of the following leads to a decrease in real GDP?
A)an increase in government spending
B)an increase in the inflation rate in other countries, relative to inflation in Canada
C)an increase in interest rates
D)households having increasingly optimistic expectations about future income
E)an increase imports

Question

Quizplus · Accepted Answer

An increase in interest rates typically leads to a decrease in real GDP as it raises the cost of borrowing, which can reduce consumer spending and business investment.

Which of the Following Leads to a Decrease in Real