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:

Population

The total number of individuals or organisms residing within a particular area or habitat.

Natural Selection

The process by which organisms better adapted to their environment tend to survive and produce more offspring, driving evolution.

Fruit Flies

Small flies belonging to the family Drosophilidae, often used in genetic research due to their short life cycles and simple genetic makeup.

Generations

Groups of individuals, most often in a society, born and living about the same time, sharing similar cultural experiences or historical events.