Question

According to the interest-rate effect, aggregate demand slopes downward (negatively) because a. lower prices reduce money holdings, increase lending, interest rates fall, and investment spending increases. b. lower prices increase the value of money holdings and consumer spending increases. c. lower prices increase money holdings, decrease lending, interest rates rise, and investment spending falls. d. lower prices decrease the value of money holdings and consumer spending decreases.

Answer 1

Answer:

a. lower prices reduce money holdings, increase lending, interest rates fall, and investment spending increases.

Explanation:

as per the interest rate effect, the aggregate demand would slope downward or negative when there is less price that decrease the holding of the money also it would rise the lending, the rate of interst would be decline and the investment spending would be rise up

So according to the given situation, the option a is correct

And, the same would be considered