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Answer to Question #109873 in Macroeconomics for Martha
Question #109873
Aggregate Spending will increase if...
1.real wealth falls, 2. Interest rate falls, 3. Consumption falls, 4. Investment falls
1.real wealth falls, 2. Interest rate falls, 3. Consumption falls, 4. Investment falls
Expert's answer
Aggregate spending increases if the interest rate falls.
How do we determine this?
- Through the aggregate demand curve between the price level and real output demanded.
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