When the Supply of Credit Is Fixed, an Increase in the Price

question 80

Multiple Choice

When the supply of credit is fixed, an increase in the price level stimulates the demand for credit, which in turn reduces consumption and investment spending. This argument is called the:

• A) real balances effect.
• B) interest-rate effect.
• C) net exports effect.
• D) substitution effect.

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Definitions:

Deviance

Behaviors or actions that violate social norms and expectations, which can range from minor to serious transgressions.

Determinism

The philosophical theory that all events, including moral choices, are completely determined by previously existing causes, suggesting that free will may be an illusion.

Constructionist Perspective

An approach in sociology and social sciences that emphasizes the ways in which social phenomena are constructed, through language, social context, and cultural practices.

Deviance

Behavior that violates the norms or expectations of a society or group.