When the Inflation Rate Increases, PAE ______, Which in Turn

question 17

Multiple Choice

When the inflation rate increases, PAE ______, which in turn causes Y to ______ because of ______.

• A)falls; fall; the income-expenditure multiplier
• B)falls; rise; the income-expenditure multiplier
• C)rises; rise; the wealth effect
• D)rises; fall; the wealth effect

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Definitions:

Passive

A grammatical voice that emphasizes the action being performed upon the subject rather than by the subject.

Equivalent

Identical in worth, role, or significance.

Tom

A male name or, in specific contexts, the male of some animal species such as a tomcat.

Test

An examination of the performance, qualities, or suitability of someone or something.