The Real Balances Effect Says That an Increase in the Price

question 67

Multiple Choice

The real balances effect says that an increase in the price level

• A)Increases the price of U.S.produced goods,causing Americans to buy more imported goods.
• B)Increases the price of U.S.produced goods,causing foreign consumers to buy fewer U.S.goods.
• C)Increases the need to borrow,which drives up interest rates and reduces loan-financed purchases.
• D)Reduces the real value of a fixed amount of savings,which reduces the purchase of goods and services.

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Definitions:

Inoculation

The practice of introducing a small amount of disease-causing agent into the body to stimulate the immune system and create immunity against a specific disease.

Pan-Indian Alliance

A unification of various Native American tribes across North America for political or military purposes, often in response to European colonization and expansion.

Cherokee Land

Territory historically inhabited and claimed by the Cherokee people, a Native American tribe indigenous to the southeastern United States.