A positive spending shock ________ real interest rates and ________ output in the short run,thereby its effect on stock prices is ________.
A)raises;lowers;positive
B)raises;raises;ambiguous
C)lowers;raises;negative
D)lowers;raises;positive

Question

Quizplus · Accepted Answer

A positive spending shock increases demand, which raises both real interest rates and output in the short run. The effect on stock prices is ambiguous because higher interest rates can negatively impact stock prices, while higher output can positively impact them.

A Positive Spending Shock ________ Real Interest Rates and ________

A Positive Spending Shock Real Interest Rates and