Suppose an economy existed in which investment, net exports, and consumption were not sensitive to changes in interest rates. For this economy, the AD curve would O have a slope less than 1 but greater than zero. O be horizontal. O have a negative slope. O be vertical. have a slope equal to 1.

MACROECONOMICS
14th Edition
ISBN:9781337794985
Author:Baumol
Publisher:Baumol
Chapter11: Managing Aggregate Demand: Fiscal Policy
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Suppose an economy existed in which investment, net exports, and consumption
were not sensitive to changes in interest rates. For this economy, the AD curve would
O have a slope less than 1 but greater than zero.
O be horizontal.
O have a negative slope.
O be vertical.
O have a slope equal to 1.
Transcribed Image Text:Suppose an economy existed in which investment, net exports, and consumption were not sensitive to changes in interest rates. For this economy, the AD curve would O have a slope less than 1 but greater than zero. O be horizontal. O have a negative slope. O be vertical. O have a slope equal to 1.
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