The real-balance effect shows that
A) aggregate demand is upward sloping.
B) a higher price level leads to higher interest rates.
C) a lower price level will increase the purchasing power of currency and increase personal consumption.
D) consumption and the price level are positively correlated.
C
Economics
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Only a change in the price level can cause a movement from one point to another point along a given aggregate demand curve
Indicate whether the statement is true or false
Economics
If the SRAS curve intersects the AD curve to the right of Natural Real GDP, the economy is
A) in a recessionary gap. B) in either a recessionary gap or an inflationary gap, but we need more information to determine which one. C) in an inflationary gap. D) at full-employment Real GDP.
Economics