Question

which of the following rises when the u.s. price level falls? a. interest rates b. the value of the dollar in the market for foreign-currency exchange c. real wealth d. all of the above are correct.

Answer 1

Real wealth rises when the u.s. price level falls.

Therefore, while a fall in the U.S. price level reasons U.S. interest charges to fall, the real alternate rate depreciates, and U.S. internet exports upward push, thereby increasing the number of goods and offerings demanded. 6.

What happens when an exchange in the price degree ends in trade in interest rates and interest-sensitive spending; when the price stage drops, you keep much less cash in your pocket and greater inside the bank. That drives down interest quotes and ends in greater investment spending and extra interest-sensitive consumption.

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