Determine how the following affects the slope of the output demand curve, and explain your results: (a)
Question:
(a) The marginal propensity to consume increases.
(b) The intertemporal substitution effect of the real interest rate on current consumption increases.
(c) The demand for investment goods becomes less responsive to the real interest rate.
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a A reduction in the real interest rate increases consumption and investment spending Thi...View the full answer
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