The real-balances effect on aggregate demand suggests that a ________.
A. higher price level will decrease the real value of many financial assets and therefore cause an increase in spending
B. lower price level will increase the real value of many financial assets and therefore cause an increase in spending
C. higher price level will increase the real value of many financial assets and therefore cause an increase in spending
D. lower price level will decrease the demand for money, decrease interest rates, and increase consumption and investment spending
Answer: B
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If the price of beef jerky rises, the substitution effect due to the price change will cause
A) an increase in the demand for hot sauce, a complement for beef jerky. B) a decrease in the quantity of beef jerky demanded. C) an increase in the quantity of beef jerky demanded. D) an increase in the demand for beef jerky.
We would expect that policies to protect workers would:
A. lead to greater unemployment. B. lead to less unemployment. C. have no impact on unemployment. D. affect those seasonally unemployed more profoundly than other unemployed workers.
Along the inelastic portion of a demand curve,
a. the change in price will always be less than the change in quantity demanded. b. the percentage change in price will be less than the percentage change in quantity demanded. c. the change in price will always be more than the change in quantity demanded. d. the percentage change in price will be more than the percentage change in quantity demanded.
In the standard Roy model, migration can lead to an increase in average skills in both locations. What is necessary for this to happen?
A. The workers who migrate from the source country are above-average in skill relative to the average source country person but are below-average in skill relative to the average destination country person. B. The highest skilled workers migrate from the source country to the destination country. C. The lowest skilled workers migrate from the source country to the destination country. D. Migration leads to an increase in average skills in both locations whenever there is positive selection. E. The workers who migrate from the source country are below-average in skill relative to the average source country person but are above-average in skill relative to the average destination country person.