Cammy has $500,000 in his bank account when he retired. Because of ______, if there is...

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Cammy has $500,000 in his bank account when he retired. Because of ______, if there is...

Cammy has $500,000 in his bank account when he retired. Because of ______, if there is an increase in the price level, other things equal, Cammy’sconsumption will ________.

		the interest rate effect; increase
		the wealth effect; decrease
		the international trade effect; decrease
		the wealth effect; remain constant

business economics

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Answer 1

Answer #1

B. The wealth effect, decrease .

if there is an increase in price level, it will lead the consumers to spend more for a particular good so the consumption also falls.

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Answer 2

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