Asked by Brett Lucas on Jul 04, 2024
Verified
Other things equal, the higher the price level, the higher is the real wealth of households.
Price Level
A measure of the average prices of goods and services in an economy at a given time period.
Real Wealth
The value of an individual's or entity's assets, taking into account the effects of inflation on purchasing power.
- Acquire knowledge of the critical factors that determine the slope of the aggregate-demand curve.
Verified Answer
ZK
Zybrea KnightJul 04, 2024
Final Answer :
False
Explanation :
Higher price levels reduce the purchasing power of household wealth, meaning that as prices increase, the real value of wealth decreases, not increases.
Learning Objectives
- Acquire knowledge of the critical factors that determine the slope of the aggregate-demand curve.