Q11. As interest rates rise, the effect on aggregate demand is to

a.reduce consumer borrowing and consumption spending.

b.increase firm borrowing and investment spending.

c.increase consumer borrowing and saving.

Q12. The economic model of aggregate demand curve and aggregate supply curve helps explain the

a.expansion and contractions in individual markets.

b.shifts in real GDP and the price level.

c.three goals of economic policy which are economic growth, high inflation, and full employment.

Q13. Consider an economy at full employment. If consumers and firms become less optimistic about the future economy then

a.price levels will rise.

b.unemployment will rise.

c.output will rise.