The Pigou Effect Refers to the Fact That Autonomous Expenditures

question 23

Multiple Choice

The Pigou effect refers to the fact that autonomous expenditures may depend on

• A)interest rates and variations in the perceived value of money balances.
• B)the real money supply and variations in the perceived value of money balances.
• C)income and variations in the perceived value of money balances.
• D)taxes and variations in the perceived value of money balances.

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Definitions:

Euro

The accepted form of money in the eurozone, made up of 19 out of the 27 member states of the European Union.

Exchange Rate

The worth of a single currency when converted into another.

Percentage

A portion of a whole expressed as a number between 0 and 100 rather than as a fraction.

Hectares

A metric unit of square measurement equal to 10,000 square meters, commonly used in agriculture and land measurement.