Which of the Following Effects Provide Incentives for Consumers to Spend

question 124

Multiple Choice

Which of the following effects provide incentives for consumers to spend less when the price level rises?

• A)the wealth effect and the interest-rate effect
• B)the wealth effect but not the interest-rate effect
• C)the interest-rate effect but not the wealth effect
• D)neither the wealth-effect nor the interest rate effect

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