The wealth effect refers to
A) the impact of household real wealth on consumption, savings, and the IS curve.
B) the impact of household real wealth on money, prices, and the LM curve.
C) the impact of household real wealth on short term and long term interest rates.
D) the impact of household real wealth on aggregate supply curve.
A
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The costs of inflation that arise from trying to reduce cash holdings are known as
A) diminishing costs. B) menu costs. C) chain-index costs. D) shoe leather costs.
Changes in conditions of supply and demand lead to price changes. For which of the following types of goods is the change in price likely to occur most quickly?
A) Commercial rents B) Hourly labor C) Public utilities D) Residential rents E) Retail groceries
What does it mean to say economics is an empirical science, and how is this related to the question of deciding on the usefulness of a model?
What will be an ideal response?
Which of the following does not hinder economic development?
a. lack of education b. poor agricultural productivity c. low investment in human capital d. lack of technology e. good nutrition