If the Reserve Bank of Australia raises the interest rate, the first effect in an AS/AD figure is a ________Shift of the ________ curve.

Name: If the Reserve Bank of Australia raises the interest rate, the first effect in an AS/AD figure is a ________Shift of the ________ curve.
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Question

If the Reserve Bank of Australia raises the interest rate, the first effect in an AS/AD figure is a  ________Shift of the  ________ curve.

Quizplus · Accepted Answer

Raising interest rates typically reduces consumer and business spending, leading to a decrease in aggregate demand, which is represented by a leftward shift of the AD curve.

If the Reserve Bank of Australia Raises the Interest Rate