Pigou effect, Macroeconomics

Assignment Help:

The Pigou effect:

A) suggests that as prices fall and real money balances rise, consumers should feel less wealthy and spend less.

B) suggests that as prices fall and real money balances rise, consumers should feel wealthier and spend more.

C) suggests that as prices fall and real money balances rise, consumers should feel less wealthy but spend more.

D) is generally accepted as adequate proof that the economy must be able to correct itself.


Related Discussions:- Pigou effect

Average price of a textbook, The demand for textbooks is Q=200-P+25U-50Pbee...

The demand for textbooks is Q=200-P+25U-50Pbeer. Assume that the unemployment rate U is 8 and the price of beer P beer is $2. When the average price of a textbook is P=$100, the el

How commercial banks create money, How commercial banks "create money" ...

How commercial banks "create money" Commercial banks obviously cannot influence the amount of currency in the economy or the monetary base, since they are not allowed to print

Regional trading arrangements, Regional Trading Arrangements: You have...

Regional Trading Arrangements: You have seen in earlier Units that India has been playing an active role in WTO discussions. While Hong Kong WTO Ministerial has saved and kept

Two evils of monopoly, A government purchase real GDP. Are increases in gov...

A government purchase real GDP. Are increases in government purchases associated with increases in real GDP?Describe the important characteristics of perfect competition and monopo

Firm‘s lowest average cost, If the firm‘s lowest average cost is $52 and th...

If the firm‘s lowest average cost is $52 and the corresponding average variable cost is $26, what does it pay a perfectly competitive firm to do if • The market price is $51?

MONETARY POLICY, What are the instruments of monetary policies

What are the instruments of monetary policies

ORTHODOX KEYNESIAN, WHAT IS THE CENTRAL PROPOSITION OF THE ORTHODOX KEYNESN...

WHAT IS THE CENTRAL PROPOSITION OF THE ORTHODOX KEYNESNIANS?

frame work, Hello sir, madam... I am hassan PHD student. I''m lost to get...

Hello sir, madam... I am hassan PHD student. I''m lost to get a good frame work of my thesis about e government and economic growth. and I need to know how to measure the variable

Calculate the numbers, Use the information below to calculate the numbers i...

Use the information below to calculate the numbers instead of "?" marks in the Table. Show and explain all your calculations?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd