Please answer all the questions thank you Question 5 1 pts A

Please answer all the questions, thank you.

Question 5 1 pts As the price level rises, ceteris paribus, people holding some of their wealth in monetary form become O less wealthy and they buy less O more wealthy and they buy more. O less wealthy and they buy more. O more wealthy and they buy less. Question 6 1 pts Business optimism about future sales tends to investment expenditures, shifting the AD curve to the O increase; left increase; right O decrease: left O decrease; right

Solution

a) \"A\"

people will become less Wealthy and they will buy less. It\'s called income effect.

b) \"B\"

More optimistic people get the more they invest, increasing the investment and shifting the AD curve to the right.

c) \"A\"

As the price rise the AD falls, apart from the real balance effect its the income effect, substitution effect that also affects the demand.

d) \"B\"

inversely related. Higher the real GDP lower the unemployment rate will be and vice versa.