The idea that a change in the price level changes the real wealth of people,and therefore their consumption spending,is called the

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The real-balances effect states that as the price level decreases, the real value of money holdings (or real wealth) of consumers increases, leading to an increase in their purchasing power and therefore consumption spending. Conversely, an increase in the price level reduces the real value of money holdings, leading to a decrease in consumption spending.

The Idea That a Change in the Price Level Changes