According to the "wealth effect," when the ________ falls, the ________ rises.
A)inflation rate; nominal value of household assets
B)unemployment rate; average level of household income
C)price level; the nominal value of household wealth
D)price level; the real value of household wealth
E)the return of savings; the nominal value of household savings

Question

Quizplus · Accepted Answer

The "wealth effect" refers to the phenomenon where a fall in the price level increases the real value of household wealth, as the purchasing power of the wealth increases, allowing consumers to buy more goods and services with the same amount of nominal wealth.

According to the "Wealth Effect," When the ________ Falls, the ________

According to the "Wealth Effect," When the Falls, the