Because investment, consumption expenditure and net exports are interest-sensitive components of expenditure, a ________ in the cash rate brings ________ in ________.

Name: Because investment, consumption expenditure and net exports are interest-sensitive components of expenditure, a ________ in the cash rate brings ________ in ________.
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Question

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A decrease in the cash rate typically lowers interest rates, which encourages borrowing and spending, leading to an increase in aggregate demand.

Because Investment, Consumption Expenditure and Net Exports Are Interest-Sensitive Components