What is the real-balance effect of an increase in the price level?
What will be an ideal response?
The real-balance effect is the change in the real value of the money balances when the price level changes, all other things constant. An increase in the price level means that the purchasing power of money balances is reduced.
Economics
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Suppose the supply of ocean front property in San Diego is perfectly inelastic. Any increases in demand for this property increases the
A) economic rent. B) opportunity cost of land owners. C) present discounted value. D) real interest rate.
Economics
Since the mid-1970s our merchandise balance of trade has been ________ and our services balance of trade has been _______.
Fill in the blank(s) with the appropriate word(s).
Economics