A falling interest rate affects the demand for consumer __________ and shifts the AD curve to the __________.
A) nondurables; right
B) nondurables; left
C) durables; right
D) durables; left

Question

Quizplus · Accepted Answer

Falling interest rates reduce the cost of borrowing, which typically increases the demand for durable goods (like cars and appliances that are financed) and shifts the aggregate demand (AD) curve to the right as consumers are more willing to spend.

A Falling Interest Rate Affects the Demand for Consumer __________