Perfect summer weather increases farm output by 30%.In the short run,this can be expected to ________ the price level and ________ real wealth.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
E) have no effect on; have no effect on

Question

Quizplus · Accepted Answer

An increase in farm output due to perfect summer weather leads to a higher supply of agricultural products, which typically decreases the price level. Lower prices increase consumers' purchasing power, effectively increasing real wealth.

Perfect Summer Weather Increases Farm Output by 30