What Is One Implication of the Real-Balance Effect

question 17

Multiple Choice

What is one implication of the real-balance effect?

• A) The part of your wealth that you hold in the form of cash loses some of its value as the price level rises.
• B) When the price level rises, people have an incentive to work harder in order to earn a higher income.
• C) When the price level falls, most consumers reallocate their spending so as to have an equal balance between necessities and luxuries.
• D) Aggregate demand and aggregate supply can never reach long-run equilibrium.

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Definitions:

Breasts

Mammary glands in humans that produce milk to feed young infants, also considered as secondary sexual characteristics in females.

Gender Roles

Cultural expectations about the behavior appropriate for each gender.

Terman And Miles

Lewis Terman and Catharine Cox Miles are known for their contributions to psychology, particularly in the study of intelligence and psychological testing.

Masculinity-femininity Dimension

A cultural dimension that reflects the degree to which gender roles are distinct or overlapping, and the value placed on masculine or feminine traits in a society.