Suppose that an increase in the price level reduces the value of real wealth, which then...

Suppose that an increase in the price level reduces the value of real wealth, which then causes a reduction in consumption but no change in saving. In this case:

	a.	there is no wealth effect.
	b.	there is both an interest rate effect and a wealth effect.
	c.	there is a wealth effect but no interest rate effect.
	d.	there is an interest rate effect but no wealth effect.
	e.	there is no wealth effect and no interest rate effect.

During the Great Depression, aggregate demand in the U.S. economy decreased. As a result, the price level _________ and real gross domestic product (GDP) _________.

	a.	increased; decreased
	b.	remained unchanged; increased
	c.	decreased; remained unchanged
	d.	decreased; decreased
	e.	increased; increased

From 2011 to 2012, nominal gross domestic product (GDP) in the United States increased by:

	a.	4.0%.
	b.	5.4%.
	c.	8.3%.
	d.	1%.
	e.	2.8%.

Expert Solution

Rahul Sunny answered 1 year ago

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