Question

In: Economics

If interest rate increases, describe the consequences on the Consumption and Aggregate Demand. Draw the graph....

If interest rate increases, describe the consequences on the Consumption and Aggregate
Demand. Draw the graph.
• If CB decreases money supply, describe the consequences on the Investment and
Aggregate Demand. Draw the graph.

Solutions

Expert Solution

Summary:

(a) Consumption decreases and Aggregate demand decreases.

(b) Investment decreases and Aggregate demand decreases.

Please refer to below images for full answer.

Rahul Sunny answered 2 years ago
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