The real-balance effect shows that

A) aggregate demand is upward sloping.
B) a higher price level leads to higher interest rates.
C) a lower price level will increase the purchasing power of currency and increase personal consumption.
D) consumption and the price level are positively correlated.


C

Economics

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The above figure shows the demand and marginal cost curves for a monopoly. The deadweight loss of this monopoly equals

A) h. B) c. C) c + f. D) c + d + e + f.

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A perfectly competitive firm has a random marginal cost with a 30 percent chance of a high marginal cost of $50 and a 70 percent chance of a low marginal cost of $40. What is the firm's expected marginal cost?

A) $48 B) $46 C) $43 D) $45

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To minimize the effect of short-term political pressure on the Fed's Board of Governors, the governors are all appointed to their terms: a. in different years, and their terms are long

b. in different years, and their terms are short. c. in the same year, and their terms are long. d. in the same year, and their terms are short. e. in the same year, and their terms are shorter than that of the chairman of the Federal Reserve Board.

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An upward shift of the consumption function might be caused by:

a. an increase in disposable income. b. a decrease in disposable income. c. a decrease in the price level. d. a decrease in household wealth. e. an increase in the interest rate.

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