Business, 27.04.2021 15:50, fatty18

For each of the following scenarios, determine whether the situation described can be attributed to the real-balances effect, the interest-rate effect, or the foreign-purchases effect. a. As a result of an increase in the price level, the cost of borrowing increases, which causes people to buy fewer cars.

1. Real-balances effect
2. Foreign-purchases effect
3. Interest-rate effect

b. When the price level decreases, restaurants become busier as more people purchase restaurant meals.

1. Real-balances effect
2. Foreign-purchases effect
3. Interest-rate effect

Answers: 1

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For each of the following scenarios, determine whether the situation described can be attributed to...