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Question
When the price level declines,
A) the interest rate rises, and consumers borrow fewer funds, which causes a movement up the aggregate demand curve.
B) the interest rate falls, and consumers borrow more funds, which causes a movement down along the aggregate demand curve.
C) the interest rate is not affected, so there is no movement along the aggregate demand curve.
D) interest rates fall, and consumers borrow more funds, which causes the aggregate demand curve to shift to the left.
Answer
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