Consider the monetary transmission mechanism. A disturbance to monetary equilibrium which changes the interest rate will affect aggregate demand through
A) a movement along the investment demand function and a shift of the aggregate expenditure curve.
B) a movement along the aggregate expenditure curve.
C) movements along the investment demand function and the aggregate expenditure curve.
D) a shift of the investment demand function and a movement along the aggregate expenditure curve.
E) a shift of both the investment demand function and the aggregate expenditure curve.
Correct Answer:
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A)positive
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