The real-balance effect indicates that at higher price levels
A. the value of the dollar will increase.
B. the purchasing power of money will increase.
C. the real value of money holdings increase, resulting in increased saving.
D. the real value of money holdings fall, resulting in decreased spending.
Answer: D
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The average cost for a typical electric-power-production firm is AC = 100 - 10Q + Q2 where Q is measured in billion kilowatt hours per day. At the current regulated price, consumers demand 4 billion kilowatt hours per day
Is this market a natural monopoly? If demand increases to 10 billion kilowatt hours, is this market a natural monopoly? Explain.
Which of the following does not contribute to differences in interest rates?
a. Different loans are for different periods of time. b. Large loans generate more administrative costs per dollar than smaller loans. c. Different loans are subject to different tax rules. d. Loans to established businesses are evaluated differently from loans to new businesses. e. The longer the period of repayment, the greater the risk of higher-than-expected inflation.
If the Fed purchases government securities in the open market, _____
a. the money supply will decrease b. the money supply will increase only if the seller of those securities is a commercial bank c. the money demand will increase immediately d. the money demand will decrease immediately e. the money supply will increase through the commercial banking system regardless of who the seller is
One of the factors causing the shrinking gap between rich and poor countries is
A. learning by poor countries. B. increasing resource discoveries. C. increasing populations in poor countries. D. transfers of income from rich countries.