The Wealth Effect Is the Tendency for

question 115

Multiple Choice

The wealth effect is the tendency for

• A) changes in the price level to change nominal wealth and consumption.
• B) changes in the price level to change real wealth and consumption.
• C) household wealth to fluctuate with changes in the level of economic activity.
• D) the marginal propensity to rise with increases in wealth.

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Definitions:

Multiple Causes

The idea that events or phenomena often have several contributing factors rather than a single source.

B Data

Behavioral data in psychology, which consists of observations about an individual's behavior in natural or staged scenarios, often used for assessing personality.

Face Validity

The degree to which an assessment instrument, such as a questionnaire, on its face appears to measure what it is intended to measure. For example, a face-valid measure of sociability might ask about attendance at parties.

Exploratory Factor Analysis

A statistical technique used to identify potentially underlying variable structures within a set of observed variables without a preconceived structure in mind.