The Pigou Effect Implies That

question 28

Multiple Choice

The Pigou effect implies that:

• A)when the price level decreases, consumer purchasing power goes up, and therefore consumers spend more
• B)when consumers spend more, the price level increases
• C)when consumer income increases, consumers spend more
• D)when the price level decreases, consumers save more, and therefore become wealthier

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Definitions:

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Established guidelines and procedures set by organizations or institutions to dictate acceptable behavior and actions, ensuring orderly function and compliance with standards.

Fairly Applied

A principle ensuring policies, rules, and decisions are implemented in a just, equitable, and unbiased manner.

Commutative Justice

A form of justice that refers to the fairness in agreements and exchanges between individuals or groups, ensuring what is exchanged is of equal value.

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