How would a new government bill that requires Visa and MasterCard to raise interest rates on debts by 1% affect aggregate demand and short-run aggregate supply?
a) Show the affect by clicking and dragging the appropriate line(s) in the graph below. Select which item you want to move from the drop down menu at the top of the graph to move that item.
b) How is the equilibrium price level affected?
- increases
- decreases
- indeterminate
c) How is the level of real output affected?
- increases
- decreases
- indeterminate