Which of the following is likely to have the largest effect on spending? O A. A change in expected future one-year real interest rates O B. A change in the current one-year real interest rate O C. Both will have the same effect on spending. D. Neither will have any effect on spending.

Which of the following is likely to have the largest effect on spending? O A. A change in expected future one-year real interest rates O B. A change in the current one-year real interest rate O C. Both will have the same effect on spending. D. Neither will have any effect on spending.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter23: The Aggregate Expenditure Model

Section: Chapter Questions

Problem 1P

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Question

Which of the following is likely to have the largest effect on spending?
O A. A change in expected future one-year real interest rates
O B. A change in the current one-year real interest rate
C. Both will have the same effect on spending.
D. Neither will have any effect on spending.

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