Consumption expenditures are sensitive to interest rates mainly because the decision to purchase a new home depends on the mortgage rate.
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Q43: A rise in inflation will
A)reduce interest rates
Q44: When inflation is rising, the Fed will
A)lower
Q45: The flatter the aggregate expenditure line, the
Q46: When interest rates increase, the opportunity cost
Q47: Unlike business investment, housing investment declines when
Q49: If net exports become less sensitive to
Q50: The positive correlation between real interest rates
Q51: If inflation increases, the central bank acts
Q52: Aggregate expenditures depend on the nominal interest
Q53: When the rate of inflation is low
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