According to the interest rate effect, an increase in the price level causes the Fed to _____ the interest rate, which _____ investment spending and _____ aggregate output.
A) increase; decreases; decreases.
B) increase; decreases; decreases
C) decrease; increases; decreases.
D) decrease; increases; decreases
E) increase; increases; decreases.
F) increase; increases; decreases
G) decrease; decreases; increases.
H) decrease; decreases; increases
Correct Answer:
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