As the price level rises, the purchasing power of households' real wealth will This phenomenon is known as the to effect. , causing the quantity of output demanded Additionally, as the price level rises, the impact on the domestic interest rate will cause the real value of the dollar to markets. The number of domestic products purchased by foreigners (exports) will therefore products purchased by domestic consumers and firms (imports) will causing the quantity of domestic output demanded to in foreign exchange , and the number of foreign . Net exports will therefore This phenomenon is known as the ▼ effect.

As the price level rises, the purchasing power of households' real wealth will This phenomenon is known as the to effect. , causing the quantity of output demanded Additionally, as the price level rises, the impact on the domestic interest rate will cause the real value of the dollar to markets. The number of domestic products purchased by foreigners (exports) will therefore products purchased by domestic consumers and firms (imports) will causing the quantity of domestic output demanded to in foreign exchange , and the number of foreign . Net exports will therefore This phenomenon is known as the ▼ effect.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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