As the price level falls, the cost of borrowing money will , causing the quantity of output demanded to . this phenomenon is known as the effect. additionally, as the price level falls, the impact on the domestic interest rate will cause the real value of the dollar to in foreign exchange markets. the number of domestic products purchased by foreigners (exports will therefore , and the number of foreign products purchased by domestic consumers and firms (imports will . net exports will therefore , causing the quantity of domestic output demanded to . this phenomenon is known as the effect.

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21-04-2018
Business

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As the price level falls, the cost of borrowing money will , causing the quantity of output demanded to . this phenomenon is known as the effect. additionally, as the price level falls, the impact on the domestic interest rate will cause the real value of the dollar to in foreign exchange markets. the number of domestic products purchased by foreigners (exports will therefore , and the number of foreign products purchased by domestic consumers and firms (imports will . net exports will therefore , causing the quantity of domestic output demanded to . this phenomenon is known as the effect.

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MrsTriplet MrsTriplet · Answer 1 · 2018-05-01T18:39:09+02:00

As the price level rises, the cost of borrowing money will rise, causing the quantity of output demanded to fall. This phenomenon is known as the interest effect.

When the interest rate increases those borrow money will still need to continue to do so but the demand for it will fall because of the amount of interest those borrowing will need to pay back. These interest rates are all subject to changes within the economy and the reflection of interest depends on the additives going on within the economy.

marvineetesh3 marvineetesh3 · Answer 2 · 2022-04-13T09:32:34+02:00

As the price level rises, so does the cost of borrowing money, resulting in a decrease in the quantity of output requested. The interest rate effect is the name for this occurrence.

What is interest effect?

The interest rate effect refers to the changes in spending and borrowing behavior that occur as a result of a change in the interest rate.

Following the setting of an interest rate by the Federal Reserve in the United States, other banks will often offer similar rates to their customers.

Those who borrow money will still need to do so if the interest rate rises, but demand for it will diminish as the amount of interest those borrowing must pay back rises.

These interest rates are all subject to changes in the economy, and the reflection of interest is determined by the additives that are present.

Therefore, the given case is denoted the interest rate effect.

Learn more about the interest rate effect, refer to:

https://brainly.com/question/13322646