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18 April, 17:48

Decreases in interest rates have made it less costly to finance purchases of new houses. what impact will this have on u. s. aggregate? demand?

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  1. 18 April, 18:43
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    Purchases of new houses is considered as investment spending which is part of the aggregate demand. When interest rate decreases, purchases of new houses and therefore investment spending increases. As investment rises aggregate demand increases shifting the aggregate demand curve rightwards given the aggregate supply curve.
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