As the general price level in the country of Norweinshire rose, the average interest rate in the economy increased, thereby lowering aggregate expenditure.This relationship between price level, interest rate, and aggregate expenditure is referred to as the:

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This relationship is referred to as the interest rate effect, which states that as the price level increases, the demand for money also increases, causing interest rates to rise. This increase in interest rates then leads to a decrease in consumer spending and investment in the economy, resulting in a lower aggregate expenditure. The other effects listed (total price effect, wealth effect, real-balance effect, and income effect) all represent different ways in which changes in the general price level can affect the economy, but they are not specifically related to the relationship between price level, interest rate, and aggregate expenditure.

As the General Price Level in the Country of Norweinshire