Answer to Question #216007 in Economics for Andies

Question #216007

Which of the following is correct about an increase in interest rate in the Keynesian model?

[1] increase price levels

[2] decrease price levels

[3] increase investment

[4] decrease investment

Expert's answer

Higher interest rates reduce investment spending.

So, the correct answer is [4].

Learn more about our help with Assignments: Economics

Comments

No comments. Be the first!

Leave a comment

Related Questions

1. Which one of the following is correct regarding contractionary fiscal policy in the Keynesian model?
2. Fiscal policy includes … [1] policy on government spending on official travel allowances of politi
3. In the Keynesian model, when the tax rate increases... [1] the multiplier increases. [2] the equilib
4. Question 1: The strategies like reduction in taxes and government budget deficit will increase the i
5. 3.20 The multiplier for a Keynesian model with a foreign sector is _____ the multiplier of a Keynesi
6. If the multiplier is 4, a R40 billion increase in net exports will …[1] increase GDP by 160 billio
7. As income rises following an increase in autonomous net exports, induced imports will