__________Explains Why Price Level Decreases for a Given Supply of Nominal

question 70

Multiple Choice

__________explains why price level decreases for a given supply of nominal money balances cause an increase in the quantity of aggregate demand.

• A)The substitution-of-foreign-goods effect
• B)The wealth effect or real-balances effect
• C)The real income effect
• D)Long-run equilibrium

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Definitions:

Assumed

Something that is taken for granted or accepted as true without proof or demonstration.

Diffusion Of Responsibility

The feeling among bystanders at an emergency that the responsibility for helping is shared by the group, making each person feel less compelled to act than if he or she alone bore the total responsibility.

Darley And Latané

Psychologists known for their research on the bystander effect, illustrating how individual responsibility is diluted in the presence of others.

Bystander Effect

A behavioral pattern observed in social psychology where people are less inclined to assist someone in need when there are others around.