The Idea That Higher Prices Reduce the Purchasing Power of Financial

question 72

Multiple Choice

The idea that higher prices reduce the purchasing power of financial assets and lead to less consumption is known as the:

• A) real balances effect.
• B) interest rate effect.
• C) foreign purchases effect.
• D) income effect.
• E) aggregate demand effect.

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Eibl-Eibesfeldt

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