The real-balance effect pertains to the effect of ________.
A. wealth changes on aggregate demand, while the wealth effect refers to the impact of changes in the price level on the real value of wealth
B. price changes on aggregate demand, while the wealth effect refers to the impact of changes in wealth on aggregate demand
C. consumer spending on the price level, while the wealth effect refers to the impact of changes in wealth on consumer spending
D. changes in interest rate on aggregate demand, while the wealth effect refers to the impact of changes in aggregate demand on people's wealth
Answer: B
You might also like to view...
Ceteris paribus when graphing a relationship refers to
A) letting all the variables change at once. B) changing the origin of the graph. C) holding constant all but two variables. D) rescaling the coordinates.
Explain how governments restrict international trade and who benefits as well as who loses from the restrictions
What will be an ideal response?
Over the long run, the supply curve becomes
a. unit elastic. b. more elastic. c. inelastic. d. negative.
Colonists supporting the American Revolution (1775–1781)
(a) were well-prepared and well-organized. (b) comprised at least two-thirds of the total colonial population. (c) faced lower transportation and communication costs than the British during the war. (d) were able to tax the colonists to finance the war.