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.
Real Wealth
The value of an individual's or entity's assets, taking into account the effects of inflation on purchasing power.
Price Level
A measure of the average prices of goods and services in an economy at a given time period.
- 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.