a. According to the "real-balances effect," or the "real wealth" effect, if prices
O decline, the purchasing power of assets will rise, so spending at each income level should rise. O decline, the purchasing power of assets will decrease, so spending at each income level should
rise. O increase, the purchasing power of assets will decrease, so spending at each income level should
rise.
O increase, the purchasing power of assets will rise, so spending at each income level should rise.
