Question

Changes in interest rates affect aggregate demand.LOADING... Which of the following is affected by changes in interest rates​ and, as a​ result, impacts aggregate​ demand?
A. Government spending
B. Consumption of durable goods
C. Business investment projects
D. The value of the dollar

Answer 1

Answer:

the answer is option B) Consumption of durable goods is affected by changes in interest rates​ and, as a​ result, impacts aggregate​ demand?

Explanation:

When interest rates increase, people tend to hold off purchases on durable goods and when it reduces, the make bulk purchases. Interest rates, therefore, affect the cost of most durable purchases.

Moreover, because durable goods are long-lived, consumers may time purchases to take advantage of low interest rates.

Examples of durable goods includes automobile, medical equipment, sports equipment, etc.

It is through this sensitivity to interest rates that durable goods purchases may affect cyclical fluctuations in real GDP.