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NYC NYC
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8 years ago
Which of the following statements is false?
A) Increases in the interest rate cause the size of the multiplier to be smaller if the economy is on the flat portion of the AS curve and to be larger if the economy is on the steep portion of the AS curve.
B) Increases in the interest rate have no effect on the size of the multiplier because higher interest rates cause consumption to increase, which offsets the crowding out of investment.
C) Increases in the interest rate crowd out both consumption and investment spending, and this increases the size of the multiplier.
D) all of the above
Textbook 
Principles of Macroeconomics

Principles of Macroeconomics


Edition: 11th
Authors:
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JesslynJesslyn
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8 years ago
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NYC Author
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#2
8 years ago
Thanks for answering Slight Smile
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