Assuming that the SRAS curve is upward sloping,which of the following statements represents a correct and sequentially accurate economic explanation?
A) The demand for bonds falls,the price of bonds falls,the interest rate rises,investment spending declines,the AD curve shifts to the left,the price level declines and Real GDP decreases.
B) The demand for bonds rises,the price of bonds rises,the interest rate rises,investment spending declines,the AD curve shifts to the left,the price level declines and Real GDP decreases.
C) The supply of bonds rises,the price of bonds falls,the interest rate falls,investment spending rises,the AD curve shifts to the right,the price level declines and Real GDP decreases.
D) The supply of bonds falls,the price of bonds rises,the interest rate falls,investment spending rises,the AD curve shifts to the right,the price level declines and Real GDP increases.

Question

Quizplus · Accepted Answer

When the demand for bonds falls, the price of bonds falls, leading to a rise in interest rates. Higher interest rates typically result in a decline in investment spending, which causes the Aggregate Demand (AD) curve to shift to the left. This shift leads to a decrease in the price level and a decrease in Real GDP, consistent with an upward-sloping Short-Run Aggregate Supply (SRAS) curve.

Assuming That the SRAS Curve Is Upward Sloping,which of the Following