The Real Balances Effect Occurs Because a Higher Price Level

question 31

Multiple Choice

The real balances effect occurs because a higher price level will reduce the real value of people's:

• A) financial assets.
• B) wages.
• C) unpaid debt.
• D) physical investments.

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Definitions:

Eutherian Mammal

A type of mammal characterized by complex placental development, giving birth to live young at a relatively developed stage.

Primates

An order of mammals including humans, apes, monkeys, and prosimians, characterized by high intelligence and dexterous hands.

Convergent Evolution

The process by which organisms not closely related independently evolve similar traits as a result of having to adapt to similar environments or ecological niches.

Placental

Pertaining to the placenta, an organ that develops in the uterus during pregnancy that provides oxygen and nutrients to and removes waste materials from the developing fetus.