When a Higher Price Level Generates an Increase in the Interest

question 129

Multiple Choice

When a higher price level generates an increase in the interest rate that induces consumers to borrow less and buy less, this chain of events is referred to as

• A) the real-balance effect.
• B) the interest rate effect.
• C) the open economy effect.
• D) the price level effect.

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Definitions:

Sylvester Graham

A 19th-century dietary reformer known for advocating vegetarianism, whole wheat flour, and the invention of the Graham cracker as part of a healthy diet.

Health Reform

Efforts and policies aimed at improving the healthcare system, including access, quality, and affordability of healthcare services.

Vegetarianism

A dietary lifestyle that excludes meat, and sometimes other animal products, for health, ethical, or environmental reasons.

American Anti-Slavery Society

An abolitionist society founded in 1833 that advocated for the immediate and unconditional abolition of slavery in the United States.