All else being equal, an increase in the rate of interest
A)causes a downward movement to the right along the nongovernment share line.
B)causes an upward movement to the left along the nongovernment share line.
C)shifts the nongovernment share line to the right.
D)shifts the nongovernment share line to the left.
E)has no effect on the nongovernment share of GDP.

Question

Quizplus · Accepted Answer

An increase in the rate of interest causes a decrease in the level of investment spending, which is included in the nongovernment share of GDP. This results in an upward movement to the left along the nongovernment share line.

All Else Being Equal, an Increase in the Rate of Interest