Which of the Following Is an Example of the Real

question 40

Multiple Choice

Which of the following is an example of the real balances effect,assuming the U.S.price level decreases?

• A) The purchasing power of money increases and people buy more goods.
• B) U.S.goods are less expensive for foreigners to buy and exports increase.
• C) U.S.production costs stay constant and profits for businesses decrease.
• D) The demand for loans decreases so interest rates decline and loan-financed purchases increase.

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Definitions:

Independent Variables

Factors in an experiment that are intentionally manipulated to observe their effect on dependent variables.

Dependent Variables

Variables in an experiment that are expected to change as a result of manipulations in the independent variables.

Confounding Variables

Factors other than the independent variable that may cause a change in the dependent variable, potentially skewing results in an experiment.

Control Groups

In experiments, the groups that do not receive the experimental treatment and are used as a baseline to compare the effects of the treatment.