According to the "wealth effect," when the ________ falls, the ________ rises
A) price level; the real value of household wealth
B) price level; the nominal value of household wealth
C) inflation rate; nominal value of household assets
D) unemployment rate; average level of household income
A
You might also like to view...
Since the mid-1980s, Federal Reserve policies have often been described as attempting
A) accelerated takeoffs. B) sustained growth. C) stalling tactics. D) soft landings.
What happens to each of the following if investment becomes more desirable at each interest rate? A. the interest rate B. net capital outflow C. the exchange rate
Which of the following is correct? In the 1990's
a. the Fed maintained low inflation because it had to follow a policy rule. b. the Fed maintained low inflation even without being required to follow a policy rule. c. the Fed was not required to follow a policy rule and let inflation move higher. d. the Fed was required to follow a policy rule, but it provided the Fed enough discretion that inflation moved higher.
Which of the following will not shift the aggregate demand curve to the right?
A. consumers becoming more optimistic about the future B. an increase in government spending C. business optimism increases D. consumers become pessimistic about the future