If the interest rate were to fall,we expect that
A)the supply of money will fall.
B)the supply of money will rise.
C)autonomous expenditures will rise.
D)the demand for money will fall.

Question

Quizplus · Accepted Answer

When the interest rate falls, it becomes cheaper to borrow money, which typically leads to an increase in spending on investment and consumption. This is referred to as a rise in autonomous expenditures, which are expenditures that do not depend on the level of income or output in the short term.

If the Interest Rate Were to Fall,we Expect That