10. and When the interest rate increases, the cost for financing investments investments projects will be undertaken: b. c. d. increases, less increases, more decreases, less decreases, more 11. a. b. An increase in the interest rate will cause the money supply curve to shift right the AE curve to shift down. The AE curve to shift up the money supply curve to shift left d. 12. Which of the following statements is true? rup) then I (down) then AE (down) then Y (down) r(down) then I (down) then AE (down) then Y(down) rup) then 1 (up) then AE (down) then Y (down) rup) then I (down) then AE (up) then Y(down) b. c. c. 13. 21 b. Which of the following statements best describes the operation of the crowding out effect? G (up) then Y (down) then r (down) then I (down) G(up) then I (down) then AE (down) then Y (down) G(up) then Y (up) then MD (up) then r(up) then I (down) G(up) then Y (up) then r (down) then I (down) C. d. 14. 2. b. C. I. Which of the following statements is truc? Y(up) then MD (up) then r(up) Y(up) then MD (down) then r(up) Y(up) then MD (up) then r (down) Y(down) then MD (up) then r(up) 15. a. b. c. d. The country of Bomba is in deep recession, with 35% of its capital not being used. Which policy is most effective in increasing output. expansionary monetary expansionary fiscal contractionary monetary contractionary fiscal Page 3 of 9