What Are the Effects of a Decrease in the Price

question 20

Multiple Choice

What are the effects of a decrease in the price level?

• A) People hold less money, so they lend less, and the interest rate rises.
• B) People hold less money, so they lend more, and the interest rate falls.
• C) People hold more money, so they lend more, and the interest rate rises.
• D) People hold more money, so they lend less, and the interest rate falls.

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Definitions:

Young-Helmholtz Trichromatic Model

A theory of color vision proposing that the human eye has three types of receptors with different sensitivities to different light wavelengths.

Primary Color

Fundamental colors (typically red, yellow, and blue) that cannot be created by mixing other colors and from which other colors can be derived.

Trichromatic Theory

A theory of color vision that suggests the human eye has three types of receptors sensitive to different wavelengths of light, corresponding to red, green, and blue colors.

Afterimage

A visual image or illusion that continues to appear in one's vision after the exposure to the original image has ceased.