769EconomicsMedium
According to the interest rate effect aggregate demand slopes downward (negatively) because?
Alower prices reduce money holdings increase lending interest rates fall, and investment spending increase
Blower prices increase money holdings decrease lending interest rates rise, and investment spending falls
Clower prices decrease the value of money holdings and consumers spending decreases
Dlower prices increase the value of money holding and consumer spending increases
Correct answer
A. lower prices reduce money holdings increase lending interest rates fall, and investment spending increase
Explanation
The correct answer is lower prices reduce money holdings increase lending interest rates fall, and investment spending increase.