When the price level increases people:
A. feel less wealthy.
B. feel more wealthy.
C. experience a bubble forming in the economy overall.
D. have the same real value of assets, regardless of the change in the price level.
Answer: A
You might also like to view...
Which of the following decreases the supply of restaurant meals?
A) Waiters get a pay raise. B) Consumers' incomes increase and restaurant meals are a normal good. C) Consumers' incomes decrease and restaurant meals are a normal good. D) The price of movies, a complement to restaurant meals, falls.
Suppose a firm's technology is represented by the Cobb-Douglas production function F(L, K) = 5LK. The wage rate is $50 and the rental rate of capital is $10. What is the least-cost combination to produce 100 units of output?
What will be an ideal response?
Why is the demand curve for new capital downward sloping?
What will be an ideal response?
Suppose the money supply is $8 trillion and nominal GDP is $14.2 trillion. What is the velocity of money?
A. 112 B. 8.0 C. 1.8 D. We cannot compute it without knowing real GDP.