As the Price Level Falls the Purchasing Power of Your

question 96

Multiple Choice

As the price level falls the purchasing power of your currency increases. This is an example of:

• A) the interest rate effect.
• B) the real balance effect.
• C) the valuation effect of prices.
• D) the substitution effect.

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Definitions:

Milton Friedman

An American economist and Nobel Prize winner known for his advocacy of free market capitalism and a key figure in the Chicago School of Economics.

Unethical

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