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Economics
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The real balances effect occurs because a higher price level will reduce the real values of peoples':

A. Financial assets

B. Wages

C. Unpaid debt

D. Physical investments

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Joshua Stredder
Joshua StredderLv10
3 Nov 2020

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Related questions

The long-run aggregate supply curve

A. is vertical because changes in the price level have no effect on real output.

B. is downward sloping because a higher price level causes businesses and consumers to reduce spending.

C. is vertical because a change in real GDP has no effect on the price level.

D. shows the various amounts of real output businesses are willing to consume at each price level.

Why are economists concerned about inflation?

a. Inflation generally causes unemployment rates to rise. 

b. Real GDP is necessarily falling when there is inflation.

c. Inflation lowers the standard of living for people whose income does not increase as fast as the price level. 

d. Inflation increases the value of peoples' saving and encourages overspending 

Why are economists concerned about inflation? 
 
A. Inflation generally causes unemployment rates to rise.
B. Real GDP is necessarily falling when there is inflation.
C. Inflation lowers the standard of living for people whose income does not increase as fast as the price level.
D. Inflation increases the value of peoples' saving and encourages overspending on goods and services

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