When the government cuts spending, aggregate demand will fall, this will depress production and employment in the short run
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Q10: The equilibrium interest rate occurs in the
Q11: The opportunity cost of holding money is
Q12: The equilibrium interest rate is the rate
Q13: When the central bank contracts the money
Q14: More reflective of current central bank policy
Q16: An increase in the interest rate reduces
Q17: According to the theory of liquidity preference,
Q18: As the interest rate falls, people become
Q19: If a country's central bank contracts the
Q20: John Maynard Keynes's liquidity preference theory suggests
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